Same-Sex Couples and Tax Planning

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The IRS is providing guidance almost weekly as to how the changes will affect Same-Sex couples.  Same-sex couples should begin tax strategizing immediately – not only for 2013 but for the future as well.  Estate planning previously done using “old rules” will no longer hold true.

Some of the questions currently being answered that our clients have asked us are:

  1. What are the pros and the cons of Same-Sex Couples that are married filing Married Filing Jointly (MFJ) and Married Filing Separate (MFS) where in the past, the only option available was to file as Single?
  2. Is filing MFJ or MFS an option for Same-Sex Couples that are married or is it now a requirement?
  3. May Same-Sex Couples that are married who previously filed as single amend prior years’ returns and change their filing status?
  4. How does this affect Same-Sex Couples registered as domestic couples but not married?
  5. If a Same-Sex Couple is married in a state that recognizes Same-Sex Couple marriages and currently, the Same-Sex Couple lives in a state that does not recognize their marriage, what will be the Same-Sex Couple’s filing status for their federal return?  How about their state return?
  6. If the taxpayer (employee) of a married Same-Sex Couple that was allowed to participate in his/her employer’s cafeteria plan for benefits but had to pay for his/her spouse with after-tax monies, is the employee eligible for a refund of Income, Social Security and Medicare taxes?  What about the employer?

The IRS has provided most of these answers already about Same-Sex Couples.  Over the next few weeks, we will be reviewing those answers as well as providing other estate planning suggestions for Same-Sex Couples.  In the interim, please contact us directly and we will be more than happy to assist you with your questions and other tax related matters.