This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

DOMA Demands Couples Reconsider Their Taxes

NEW YORK ( TheStreet) -- Same-sex couples eligible to get married in 13 U.S. states may not place taxes on their matrimonial priorities list, but the Supreme Court's ruling to dissolve the Defense of Marriage Act demands consideration.

"There is enormous cause for joy, but before couples make hasty emotional decisions, they need to make sure they understand what marriage means to their personal finances," says certified public accountant Elisha Wiesenberg of Wiesenberg & Co., an L.A. tax services company.

"Last week's change in the law is going to impact a married couple's financial life, from the way they file taxes to how they plan their estates and receive benefits, and they need to understand those consequences," he says. "They'll want to take time to sit down with an accountant and also have some honest conversations with each other about finances. This is a potentially huge change for thousands of long-term couples who have gotten used to things the way they are, and one that has very real, long-lasting financial implications for them."

Tax management should be simplified for same-sex couples. But some headaches await, especially in California, where there's an archaic law on the books requiring married couples to "first combine and then split" their income before filing taxes, Wiesenberg says. The Internal Revenue Service is expected to rule on the law.

As a result of the ruling, Wiesenberg says, same-sex newlyweds can expect:

Easier filing. Tax filing should be way easier for same-sex couples. Traditionally, federal tax reporting is simpler for married couples than it is for non-married couples sharing a residence.

Lower preparation prices. The cost for professional tax services should decline for same-sex couples. That's because tax filing is less complicated for married couples than for nonmarried couples, he says.

Potential penalties. Same-sex newlyweds may well wind up paying more in taxes, thanks to the infamous "marriage penalty," although circumstances differ depending on the state. "In community property states like California, the IRS already recognized combined income, which created a favorable tax treatment," Wiesenberg says. "However, federal recognition of marriage could subject couples to marriage penalty taxes, which can add thousands of dollars to tax bills each year."

Amending old returns. As states have different rules on marriage and taxes, Wiesenberg advises working with a tax specialist to possibly amend previous years' tax filings to claim extra savings.

With what he describes as "myriad" tax rules affecting same-sex couples, Wiesenberg says not to assume anything. He advises checking with a tax professional to get every dime in savings possible on your tax returns, and the sooner, the better.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $95.18 1.64%
FB $117.44 -0.95%
GOOG $692.33 -0.84%
TSLA $232.32 -3.92%
YHOO $36.02 -1.40%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs