LGBT couples may be making this mistake on their tax returns

Personal Finance


A common mistake among LGBT couples is the idea that in order to avoid the marriage penalty — the higher taxes that affect married couples with high incomes — they need to file separately, said Scott Squillace, an estate-planning attorney who specializes in working with LGBT clients.

“There is a misconception that people think it means you can calculate your taxes as a married couple or do it as if you were single,” he said.

“But once you’re married, you’re married for all income tax purposes — you can’t go back to your individual income tax treatment by filing separately.”

Filing separately makes sense for some: For instance, if your spouse has a dubious source of income and isn’t being completely forthcoming with the IRS, you might want to file separate returns so that you’re not responsible for his or her tax liability.

For the most part, however, married couples who file separately take lower standard deductions ($6,300 as opposed to $12,600 for joint filers in 2017).

They also miss out on a range of tax credits, including the child and dependent care credit and the American opportunity and lifetime learning credits.



Source link

Products You May Like

Articles You May Like

Your first trade for Thursday, April 19
Southwest engine failure couldn’t ‘have happened at worse time for GE’
Here’s the price tag Americans would put on their social media data
Volvo Cars CEO Hakan Samuelsson on US-China trade tariffs
BNY Mellon profit beats on strong growth across businesses

Leave a Reply

Your email address will not be published. Required fields are marked *