by Kate Childs Graham | April 02, 2012
As Tax Day draws closer, the nerves and frustrations of workers who identify as lesbian, gay, bisexual and transgender (LGBT) are growing.
“You can’t do online tax filing because the federal government doesn’t recognize same-sex couples,” Donn Uyeno, secretary of Local 3339 in West Hollywood said, “It’s not fair that we have to hire an accountant to figure this out for us.”
But a CPA’s expertise is needed for many LGBT couples who can’t crack the oppressive tax code. While marriage equality has been passed in several states, the federal Defense of Marriage Act (DOMA) says that even if legally married under state law, same-sex couples are considered unmarried for federal tax purposes.
Here are just a few ways LGBT workers get the short end of the federal tax code:
- The fair market value of same-sex partner health benefits is taxable to the employee. It’s not for heterosexual married couples;
- Same-sex couples are forced to file as “head of household” instead of “married filing jointly,” so they can’t combine income or deductions to get a lower tax rate;
- The child tax credit phases out at a lower rate for people filing as “head of household,” while a heterosexual married couple filing jointly can claim the full credit; and
- Should their partner die, same-sex spouses don’t qualify for the marital exemption for inheritance taxes.
All of this adds up to about $6,000 extra per year that same-sex spouses pay in taxes, according to a recent report by H&R Block and CNNMoney.