Sunday, April 14, 2013

Tax Day


If you are part of a same-sex couple, April 15th can be a daunting date. Tax matters that are simple for heterosexual couples can be quite complicated for gay and lesbian couples -- from filling out a federal tax return to determining whether a spouse's health insurance benefits are exempt from taxation. To make matters more difficult, some states recognize same-sex marriages or treat domestic partnerships as marriage-like for tax purposes. Others don't.

Marriage isn’t just a legal, religious, or cultural institution — it’s also a fiscal one, with big ramifications for the way that the government taxes ordinary Americans and spends money to support them. As gay marriage has spread on the state level, economists have begun to measure its impact on the government’s coffers.

Most of the research to date suggests that legalizing gay marriage would have a positive net impact on government revenues, thus helping to decrease the deficit.

There are two major ways that increasing gay marriage — and, for that matter, any kind of marriage — would affect the budget. First, it would likely reduce dependence on public benefits, not just because married couples are more likely to support each other financially but also because of how benefits change according to one’s legal marital status.

Legalizing gay marriage would also change the way that the government collects taxes on gay couples. But the overall fiscal impact would likely be smaller as some couples would pay less in taxes while others would pay more due to the so-called “marriage penalty” — an idiosyncrasy in the tax code that penalizes relatively well-off couples where both spouses earn comparable salaries.

Cynthia Leachmoore, a tax preparer in Soquel, California, has about 40 same-sex married couples as customers ranging from teachers to Silicon Valley workers.

A handful of them have joint incomes that top $1 million. They're facing $25,000 to $30,000 more in federal and state taxes if DOMA goes down and they file taxes jointly, she said.

"Most of them don't care. They'd really like to be able to say that they were married" on tax returns, Leachmoore said. "That's more important to them."

1 comment:

Jay M. said...

We can only hope for the best.

Peace <3
Jay