Are married gay couples suffering a 'Gay Tax'?
Wed, 28 Dec 2011 00:00:00 GMT —
Gay marriage is not recognized by the Federal Government. And that has big implications when it comes to tax time.
And this raises a simple question...are married gay couples suffering an unfair "Gay Tax"?
CNN Money did a detailed analysis of a typical married gay couple as compared to a traditional, hetero-sexual one when it comes to Federal Income Taxes. They found that in some cases that difference can add up to as much as $6000.
"It's costing these families thousands of dollars a year, as well as the emotional pain and suffering," Ken Weissenberg told CNN. He is a partner at accounting firm EisnerAmper who is in a same-sex marriage himself.
According to the article, one scenario involved families with one spouse earning $100,000 and the other spouse staying at home with the family's two kids.
In the same-sex family's case, the working spouse files as "head of household," and the stay-at-home spouse is considered a "qualifying relative."
Say that couple reported no other income or deductions. In that case, the same-sex household's federal tax bill is $15,199, which includes tax the head of household must pay on health insurance premiums to cover the stay-at-home spouse. That's $4,543 higher than the straight couple's liability.
Why? Because the "head of household" designation comes with some disadvantages.
Filing as "head of household" instead of "married filing jointly" exposes more income to a higher tax bracket. Plus, standard deductions, which are given based on the filing status to taxpayers who don't itemize deductions, are lower for a head of household than they are for married couples filing 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.
"But it shouldn't stop anyone from getting married," Weissenberg told CNN, 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."
H&R Block crunched the numbers for the CNN article and they list many different scenarios with the same result...much higher Federal taxes on same-sex married couples.
Is the Federal Government's policy of not recognizing gay marriage the equivalent of a "Gay Tax"? Should the Feds treat a gay-marriage the same as a hetero-sexual one for tax purposes?