I got a couple of calls/e-mails from clients who want to know what will happen with the recent IRS ruling where the IRS will recognize same-sex marriages performed in states where it is legal (click here for IRS notice). The basic answer is the IRS will allow same-sex couples to file as married individuals for 2013 (either married filing jointly or separately) AND the couple can decide if they want to file amended returns for the last 3 years. Filing amended returns is not mandatory. Same-sex couples can also apply for refunds for gifts and estate taxes, if eligible.
So, here’s what I’d recommend for same-sex couples – It’s time to do some tax planning! You should look at your 2013 tax situation and decide if you’re filing together (jointly), or separately. Either way, you should look at your withholding for the year as your tax bracket may change – filing jointly may reduce your tax bracket and filing separately might increase it! The reason for the latter scenario is the MFS (Married – Filing Separately) status has some of the worst tax brackets so you may want to adjust your withholding up or down.
Looking back over the last 3 years, you should look to see if you can get back a refund by filing jointly – since filing amended returns is optional, then I’d say file for any year you’d get a refund, but not for years you’d owe. The ruling doesn’t say you must file amended returns for all eligible years so don’t file an amended return if you owe.
Your tax return preparer should be able to help you with filing amended returns, but be prepared to pay for the service – preparing the combined return is just like filing a new return from a preparer’s view point.
Also, your state tax return(s) may be eligible for amended return(s) as well – that depends entirely on the state where you live.
Here’s a free brochure to with info on this topic.
Please share with anyone you think will benefit from this – and feel free to send me your comments & questions!
Thomas C. Hodge, CPA
The Hodge Group
3040 N. Menard Avenue
Chicago, IL 60634