Married same-sex couples can't file individual tax returns after Sept. 16
Last week鈥檚 on same-sex marriages received a lot of attention. Going forward, a same-sex married couple must file federal income tax returns as married, regardless of whether the state where they live recognizes their marriage. In addition, same-sex couples may鈥攂ut don鈥檛 have to鈥攆ile amended returns for some earlier years to recoup any extra taxes they paid because they had to file as individuals.
But most reports on the ruling have missed an important detail: the IRS will begin applying the new rule on September 16. That gives same-sex couples who haven鈥檛 yet filed their 2012 tax returns just a few more days to file as individuals if they choose to do so. For some, that could mean a much smaller tax bill.
At issue are marriage penalties, the additional income tax some couples have to pay because they must file their federal tax returns as married. Because tax parameters aren鈥檛 proportionately higher for couples than for singles鈥攆or example, higher tax brackets for joint filers apply at less than twice the income as for individuals and phase-in and phase-out ranges don鈥檛 start at double the income level鈥攕ome couples pay more income tax than if they were single. That鈥檚 most likely to be the case if spouses have similar incomes.
For example, if both spouses earn $100,000, have no children, take the standard deduction, and have no other income, their 2012 tax bill filing jointly would be $38,319. If they could file individual returns, each would pay $18,731 in income tax. The total鈥�$37,462鈥攚ould be $857 less than what they鈥檇 pay as a couple. They pay a marriage penalty.
Of course, many couples pay less tax than they would if they were single and thus get a marriage bonus. If one spouse earned all of the hypothetical couple鈥檚 $200,000 income and the other earned nothing, filing jointly would save them nearly $9,000, a hefty marriage bonus.
It鈥檚 not always obvious whether a couple will pay more or less tax because they are married. You can get an idea of the difference between filing jointly or as individuals using the Tax Policy Center鈥檚 Marriage Bonus and Penalty. But one warning: the calculator cannot take account of every tax situation鈥攜ou鈥檒l have to complete and compare joint and single tax returns to find the exact bonus or penalty. Of course, the same rules will soon apply to both same-sex and heterosexual couples.
For a few more days, however, same-sex couples who were legally married last December 31 and who haven鈥檛 yet filed their 2012 tax returns can avoid marriage penalties one last time by filing individually. If you鈥檙e in that situation, you could save a lot of money if you get your 2012 tax return in soon.
Disclaimer: the Tax Policy Center doesn鈥檛 give tax advice.聽 If you have any doubts about how the new tax laws would affect you, consult a real tax advisor.
