The June 26th Supreme Court’s same sex ruling changes does a little more for same-sex couples than just allowing them to get married, and one of the first issues that should come to mind is taxes. Before this ruling, couples living in states baring gay marriage would have to file as many as 5 personal tax returns each year!
For example, a legally-married same-sex couple living in Michigan may have had to prepare a joint federal return, 2 separate Michigan returns, and 2 mock federal married filing separately returns. But now, if filing jointly, they only need to file 2 returns, one state and one federal.
The court’s ruling requires all states to recognize same-sex marriages, so tax filings for same-sex couples have been greatly simplified. Married same-sex couples are now required under state and federal law to file under a married filing status, regardless of whether they are filing jointly or separately. There are a few situations where you may want to file separately, but for the most part, it is best to file jointly because couples end up paying much less in taxes that way.
Another issue that has changed with the Supreme Court’s ruling is, now married couples are exempt from estate taxes. Before the Supreme Court’s ruling, the spouse of the deceased person in a same-sex marriage would be subject to an estate tax before being transferred, provided their estate totaled over $5.34 million as of 2014. Now, when a spouse dies, transferring their estate to the surviving spouse is exempt from estate taxes.
Obviously this doesn’t affect most estates, however, same-sex married couples are now exempt from gift taxes as well. In the past any transfer of property or assets, totaling over $14,000 per gift as of 2014, was subject to the gift tax. But as a result of the Supreme Court’s ruling, exemption of gift tax is unlimited between same-sex spouses.
Independent Contractor Tax Advisors stays current and up to date on all issues related to taxes, and we can help you set up and maintain a tax strategy that can save you thousands on taxes. Contact us to set up a free tax consultation today!
CLICK HERE FOR A FREE TAX CONSULTATION
Facebook Page
Twitter Page
Google+
YouTube
LinkedIn