Queer Taxes Filing Tips For The LGBT Community

Tax season is upon us, and for couples within the LGBTQ community, it’s been only a few years of filing taxes together. LGBTQ families likely have different needs than straight couples, and trans taxpayers may need guidance on how to file appropriately.

These are the top four considerations for non-heterosexual couples and their families — luckily, we’ve got the tips on how you and your partner can pay what’s due to the IRS in a timely, correct fashion.

1. File your taxes jointly only if you’re legally married to your partner.

Wedding bells have been ringing in the wake of the Supreme Court’s June 2015 ruling that same-sex couples have the legal right to marriage across the United States.

Even so, some LGBTQ couples choose not to become legally married for a variety of reasons. But if you and your partner haven’t tied the knot, you won’t be able to file your taxes jointly.

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2. File your taxes with the name on your Social Security card.

People who’ve changed their names must file their taxes with the name on their Social Security card. Maybe you’ve begun going by a different name at work and even have credit cards in your preferred name.

If your name doesn’t match your Social Security card, the IRS won’t accept your tax return.

When changing your name, the first thing you should do after receiving the court order is to take it to the Social Security Office. This also affects people changing a name after marriage. Make sure to give yourself enough time to get a new Social Security card after changing your name, since it can take up to 14 days.

3. Unmarried homeowners may benefit by deducting mortgage interest.

The Ninth Circuit ruled that unmarried co-owners of a home can deduct mortgage interest on up to $2 million of acquisition debt. Married couples, meanwhile, are limited to $1 million. You may be able to receive a refund from previous years, as well.

4. Couples adopting children may benefit from marrying first.

Are you and your partner thinking about adoption? Whether you do it together or as a second-parent adoption, you may want to consider marrying in the year prior to adoption. Let’s say, for example, Jane wants to adopt Jill’s child. Any expense that Jane incurs prior to marriage isn’t included in the qualified adoption expenses.

Meanwhile, Jim and Frank haven’t married, but they want to adopt a child together. Their joint income is more than $195,000 and the maximum allowance is $194,580. For both of these couples, it may be more beneficial to marry prior to the adoption.

5. Consider hiring a professional.

Most couples can file their taxes independently through TurboTax or H&R Block, but Rosalind W. Sutch, a certified public accountant (CPA) who focuses on LGBTQ tax and financial planning issues at Drucker and Scaccetti in Philadelphia, recommends that some couples seek advice from a qualified tax professional familiar with their specific issues.

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Unmarried couples who live together and share ownership of property should talk to a tax professional, especially if they have children.

Married couples who did estate planning before national marriage equality passed in 2015 should also review their documents with a professional to see what, if anything, you need to change.

Sutch explains that she has recently seen a number of situations and mistakes that LGBTQ couples should be aware of when filing taxes. In one case, unmarried partners with teenage children used two different tax preparers, and they lost tax credits because the preparers didn’t communicate. In this case and others, it’s wise to ensure your tax professionals communicate and share records with each other.

Additional background information for this article was provided by Vincenzo Villamena, CPA.