Yes, the tax deadline is upon us here in the U. S., one of the occasions when the bias against gay and lesbian couples stares me in the face most directly. How are we unequal? Let me count the ways. First, payroll taxes. A gay or lesbian employee owes income and payroll taxes on employer contributions towards her or his domestic partner’s health insurance. (See HRC for a hypothetical example.) This inequality strikes lesbian and gay couples with children particularly hard, since they are the ones most likely to have one partner staying home with the kids, dependent upon the other for health insurance.
Next, IRA regulations. A same-sex couple with one stay-at-home parent can only contribute to the employed partner’s IRA, not to both. An opposite-sex married couple filing jointly can contribute to both partners’ IRAs, which can mean up to $4000/year more in retirement savings vs. a same-sex couple. Let’s see: $4000/year times three to five years with one parent home, times 30-40 years till retirement, and compound rate of return. . . .
The Earned Income Tax Credit, head of household status, and the Child Tax Credit again treat lesbian and gay families unfairly, as HRC again details. Other tax regulations, such as tax on gain from the sale of the taxpayer’s principal residence, estate tax, and taxation of retirement savings, also discriminate, although the impact on children may not be as frequent or direct.
For me, it’s partly about the money, and partly about the muscle spasm I get every time I check the “Single” box on my return. It feels so . . . dishonest. Despite my frequent criticisms of the current administration, I do believe in the underlying American system, and have always tried to be scrupulous in my dealings with the government. I’m also the granddaughter of an IRS lawyer. Yet here I am, every year, telling a deliberate untruth to the IRS. I am not single. I have a partner of thirteen years, and we are both listed on our son’s birth certificate as his legal parents. We are living together as a family and raising him.
Before this devolves into a complete well of bitterness, let me try to offer some useful information. Since it’s unlikely that marriage rights or the tax code will change before next Monday, you may want to revisit my earlier post with some links to tax resources for LGBT couples, or check out the IRS site itself for downloadable forms, instructions, and information.
For those of you lucky to live in Massachusetts (Go Sox!) and be married in the eyes of the Commonwealth, the Massachusetts Department of Revenue has these helpful hints on filing your state and federal tax forms. I particularly like “Where elements of Massachusetts taxation derive from federal law . . . same-sex spouses may need to perform special calculations to arrive at the proper Massachusetts tax figure.” As if the darn forms weren’t complicated enough. I’m beginning to suspect a secret cabal of tax accountants working to legalize same-sex marriage in the states, but not at the federal level. With programs like TurboTax making it easier for people to prepare their own tax forms, they needed to come up with some way of generating business.
OK, so I avoided more bitterness, but couldn’t escape the satire. Must be tax time.