Still unsure of what’s to come but knowing that changes are on the way the IRS issued the following statement on its website:
We are reviewing the important June 26 Supreme Court decision on the Defense of Marriage Act. We will be working with the Department of Treasury and Department of Justice and we will move swiftly to provide revised guidance in the near future.
- Income tax: Married same-sex couples will now be able to file their federal income taxes jointly. For many couples — especially those where one person earns significantly more than the other — merging incomes for tax purposes will result in big savings. On the other hand many two-earner couples to their chagrin will wind up paying more in taxes.
- Health insurance: Some married same-sex couples pay income tax on imputed income for the medical benefits one partner receives through the other’s health insurance plan; this will now likely change.
- Estate and Gift tax: Under DOMA any gift between married same-sex spouses can use the unlimited gift tax marital deduction. Same-sex married couples will also be eligible to split gifts to take advantage of a doubled annual gift tax exclusion. In addition the unused gift and estate lifetime exclusion of the decedent spouse is now portable and will allow the estate of the surviving spouse to utilize it.
- Social Security benefits: Same-sex married couples will now be eligible for the same federal tax treatment and Social Security benefits as married opposite-sex couples in the event that one spouse passes away. This means a surviving spouse will be eligible for Social Security survivor’s benefits and will be exempt from the federal estate tax on assets exceeding $5.25 million.
- Flexible Spending Accounts: Workers can be reimbursed from their health flexible spending accounts / reimbursement accounts for their same-sex spouse’s medical costs.
Lindemeyer CPA will continue to follow this ruling and any implications it has when it comes to your taxes. For questions tax-related questions on this subject please contact us online.