Tax tips for queers


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Tax season is upon us and if you're in a same-sex relationship it can be a tricky time.  Recently the NY Times posted an article about what same-sex couples can do to get the most out of tax season - as if there is a good thing about taxes.

As Benjamin Franklin said 'In this world nothing can be said to be certain, except death and taxes," and being gay and in a relationship we get screwed on both since we have no "rights" at the Federal level of the government.  Even if you're legally wed, you and your partner still have to file separate tax returns because the Federal government does not recognize those marriges.

Last year a study showed that being in a gay relationship cost almost $30K more than in a heterosexual marriage due to the extra paperwork and legal requirements that need to be in place to protect assets of a gay couple - and taxes are no different.

Click through for some of the tips provided by the NYT:

Here's one tip from the article:

New Items for 2009 If you bought a home and expect to be eligible for the home buyer's tax credit, remember that you must split the $8,000 credit with your partner. "The I.R.S. was very clear that if two unmarried people or a same-sex couple buy a home, they need to split the credit," Ms. Salandra said. But there is a potential benefit: Since the home buyers' credit phases out as your income rises, and same-sex couples don't combine their income on their federal returns, the lower-wage earner may still qualify for half the credit even though the higher earner is above the limit, she added.

Separately, the Internal Revenue Service issued guidance in a memo from its chief counsel's office that clarifies how much mortgage interest is deductible for people who own homes jointly. Taxpayers who file as single or married filing jointly can generally deduct all of their mortgage interest on up to $1 million in mortgage debt and $100,000 in home equity debt (or half those amounts if married filing separately).

Some same-sex couples  --  or the professionals advising them   --  have interpreted that to mean that each partner could deduct interest on up to $1 million in debt. But in a memo in March 2009, the I.R.S. said that the $1 million limit applies to the home, and not each taxpayer (at least in a situation where two taxpayers co-own their only residence). So a gay couple who jointly owned a Manhattan apartment could deduct interest on only up to $1 million in debt, not $2 million. "That is incredibly significant for gay couples, especially in a high real estate market like New York City," Ms. Salandra said.

Yet, if same-sex relationships were recognized by the Federal government we wouldn't have to jump through so many hoops, and we'd get almost 1,200 rights that are automatically provided to heterosexuals who are married.

---> Read the full article here

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