- 10 Strategies to Retire Earlier Than Your Friends on the Same Salary
- 8 Easy Ways to Save on Your Next Football Party
- Best US States for Young People
- The 10 Most Expensive Neighborhoods for Renters
- Missed Loan Payment? Your Car Might Not Start
- Do You Text While Walking? This Lane Was Made for You
- How Come You Still Can’t Get a Home Loan?
- You May Want to Retire in One of These States
Uncle Sam says there’s nothing wrong with rainbow pride, but he wants to know where that pot of gold is.
The IRS announced this week that its rules for married opposite-sex couples will now apply to all legally married same-sex couples. “The ruling applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage,” the Treasury Department says.
The change resulted from the U.S. Supreme Court’s June ruling that struck down parts of the 1996 Defense of Marriage Act. That case directly involved taxes: Because of DOMA, Edith Windsor had to pay $363,000 in taxes when she inherited the estate of her late wife, Thea Spyer, while a heterosexual spouse would have paid nothing. “Thanks to today’s ruling at the Treasury Department, no one will have to experience the pain and indignity that I went through ever again,” Windsor said in a statement quoted by The Washington Post.
Here’s what the ruling means for same-sex couples:
- “The policy applies only to legally married couples and not to those in registered domestic partnerships, civil unions or similar formal relationships recognized by certain states,” the Post says.
- After Sept. 16 (when the policy takes effect), couples will have the option to amend the past three years’ tax returns, which could generate a refund.
- Henceforth, same-sex couples will file with “married filing jointly” or “married filing separately” status.
- “The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, standard deductions, employee benefits, contributing to an IRA, and claiming the earned income tax credit or child tax credit,” the Treasury Department says.
- Some people could end up paying more as a result of the new rules. Says USA Today, “Not all same-sex couples will benefit from the decision; some may pay higher income taxes as a result of the ‘marriage penalty.'”
Welcome to the married taxpayers club. With all these changes, it’s a good idea to start preparing for next tax season. We have advice in the video below.