Gay Couples Lose Big On Tax Breaks Because Their Marriages Aren't Recognized
Gay couples whose marriages aren’t viewed as legitimate by the federal government have to pay heavily due to the indignity. Same-sex couples reportedly pay as much as $6,000 more a year in taxes because they aren’t allowed to file jointly.
An analysis commissioned by CNNMoney found that federal tax laws typically cost gay couples. Although some states recognize same-sex marriage, the IRS forces married gay couples to file separately, keeping them from combining their resources to earn certain deductions and credits.
Taxes paid on health insurance premiums also come into play. In an example cited in the story, a gay couple earning $100,000, with one spouse staying at home, may have to pay $4,543 in federal taxes more than a straight couple due to taxes on health insurance premiums from disadvantages in filing as a head of household.
On the other side of the coin, some gay couples may benefit financially by avoiding the marriage penalty, in which a high-income couple with no kids may have to pay more taxes than they would if they filed as single. But that’s the exception rather than the rule.
Punishing a couple financially due to sexuality is unfair. With the numerous changes in tax law each year, it’s tough to figure why the IRS hasn’t come up with a fix to the issue.
Same-sex spouses lose big on taxes [CNNMoney]
Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.