Saturday, October 2, 2010

Clock is Ticking On Amending Returns of Same Sex Couples

Taxpayers who extended their 2006 returns have until October 15, 2010 to amend.  In a previous post, I discussed at some length the Gill decision.  Under the Defense of Marriage Act, same sex couples are not considered to be married for purposes of federal law.  The Gill decision found that a significant portion of DOMA is unconstitutional.  Among many other things, the Court ruled that couples married under Massachusetts law should be entitled to file joint federal income tax returns.

This will generally be more beneficial to the extent that there is a difference in the couples income.  For example if Robin and Terry each make $100,000, they will likely be better off single.  If Robin makes $200,000 and Terry makes nothing a joint return will produce a lower tax.  The way various exemptions, phase-outs and limitations work, though, makes any general rule like that of limited applicability.  If, for example, Robin had disallowed investment interest and Terry had investment income, a joint return might producing savings even if their incomes were equal.  They only way to tell for sure is to run the numbers.

As I have pointed out in another post, the decision to file a joint return is not just a numbers exercise.  Joint returns create joint and several liability.  The Gill decision applies to couples who are married under state law.

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