Same-sex spouses lose big on taxes

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Kenneth Weissenberg and his spouse, Brian Sheerin, pay an extra $5,000 a year in taxes because they are unable to file jointly as a married couple.

Courtesy of CNNMoney:

NEW YORK (CNNMoney) — Same-sex spouses are paying as much as $6,000 a year in extra taxes because the federal government doesn’t recognize gay marriage, according to an analysis conducted for CNNMoney by tax specialists.

While marriage provides tax benefits for many heterosexual couples, same-sex families don’t enjoy the same perks because they are not allowed to file their federal returns jointly.

NEW YORK (CNNMoney) — Same-sex spouses are paying as much as $6,000 a year in extra taxes because the federal government doesn’t recognize gay marriage, according to an analysis conducted for CNNMoney by tax specialists.

While marriage provides tax benefits for many heterosexual couples, same-sex families don’t enjoy the same perks because they are not allowed to file their federal returns jointly.

And then there are the kids. When a child tax credit is claimed, the gap between same-sex households and married couples can grow even wider.

The heterosexual couple in H&R Block’s example is able to claim the full $1,000 child tax credit for each kid. But the credit phases out sooner for families claiming “head of household.” So in this case, the cost of being unable to file jointly comes out to $6,043 for same-sex households.

The one exception where same-sex spouses can actually come out ahead is the so-called marriage penalty. For some same-sex spouses in the higher tax brackets who work and have no children, filing tax returns using the “single” status makes the liability a little lower than that of heterosexual married couples. Still, “single” status is typically less advantageous than “married filing jointly.”

They tried to deduct what?!

Other factors driving up the bill: It’s not just income taxes that are costing same-sex couples more.

Many same-sex spouses don’t qualify for the same marital exemptions given to other families for inheritance taxes and gift taxes. In addition, same-sex households receive lower tax exclusions for capital gains on the sales of a home (unless the home is jointly owned and each spouse qualifies for the exclusion).

All of this is not only costing same-sex couples more, but it’s a paperwork and compliance nightmare.

Same-sex families who live in states where gay marriage is recognized typically have to fill out up to four separate returns — including mock federal returns – to cover both their state and federal taxes. Plus, hiring a tax preparer to take on these more complicated returns tends to be significantly more expensive.

“But it shouldn’t stop anyone from getting married,” said Weissenberg, who says he pays an extra $5,000 in taxes per year simply because he is in a same-sex marriage. “If I had to pay twice as much in taxes to be married to my husband, I would.”

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