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same sex couple taxes

Can Same Sex Couples File Joint Federal Tax Returns?

February 14, 2017 : Mike Slack - The Tax Institute

Editor’s Note: Around Valentine’s Day – love is in the air. We might not initially think of the implications that come along with a relationship… Like taxes! So, can same sex couples file joint federal tax returns?? We’ll share some insight here…

Can same sex couples file joint federal tax returns? This was the result of two landmark U.S. Supreme Court cases. In 2013, U.S. v. Windsor passed the provision of the Defense of Marriage Act treating same-sex spouses as unmarried under federal law as being unconstitutional. This decision allowed same-sex couples who were married in states that already recognized their marriages to file as being married at the federal level.

Two years later in Obergefell v. Hodges, the court established the 14th Amendment of the U.S. Constitutions requires all states to recognize same-sex marriages – essentially granting same-sex couples equal rights as opposite-sex couples. (It should be noted, that this is not extended to non-marital relationships, such as domestic partnerships or civil unions.)

With these two decisions, married same-sex couples are generally required to file one of two ways:

  1. Married filing jointly
  2. Married filing separately

Furthermore, the Obergefell v. Hodges decision also affects state tax returns, as states are now required to constitutionally recognize marital status for tax purposes, even if the state previously did not do so.

Here is more detail on the two types of filing opportunities for same-sex couples:

Married Filing Jointly

For most couples, “married filing jointly” is the preferred filing status because of the added tax benefits, including eligibility for certain tax credits. It’s especially beneficial where the spouses have varying income levels, as it averages out their incomes. For example, if one spouse makes $30,000 and the other $70,000, they are essentially treated as if they both earned $50,000. In that situation, they would save approximately $1,800 in federal income tax by choosing to file jointly versus separately.

Married Filing Separately

Filing separately can sometimes lower your tax bill. For example, if one spouse has low income and high medical bills, it could work in their favor to file separately to claim these expenses as itemized deductions. This is because their spouse’s income could make it difficult to reach the threshold for claiming medical expenses. These expenses must exceed 10% of adjusted gross income (AGI) to be claimed as itemized deductions and then only the amount that exceeds 10% of AGI is allowed as a tax deduction.

Hopefully we answered the question: “Can same sex couples file joint federal tax returns?”. View more answers to tax questions, or check out our income tax calculator to stay ahead of the game and estimate your tax refund or taxes owed.

 

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Mike Slack - The Tax Institute

Mike Slack - The Tax Institute

The Tax Institute

Mike Slack, JD, EA, is a senior tax research analyst at The Tax Institute. Mike leads research teams focused on business and investment tax issues.

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