Tuesday, March 5, 2013

If DOMA overruled, some gay couples will face 'brutal' income tax increases

Although advantages in estate-planning and settlement would be of almost universal benefit to gay couples, the income tax ramifications of DOMA are not so clear cut. Says Bloomberg:

     A disadvantage for high-earning couples on the income-tax side is the marriage penalty. Currently, two partners each earning $400,000 a year in taxable income don’t pay the top rate of 39.6 percent, which starts at income above that amount for singles and at $450,000 for married couples.
      If the federal law is overturned and the same-sex spouses file jointly, their combined income is $800,000, of which $350,000 would be subject to the highest federal rate. “That’s kind of brutal,” Olivieri said.

1 comment:

  1. Bose in St. Peter MNMarch 5, 2013 at 1:33 PM

    It's been left under- (but most often, un-) reported that same-sex couples are not just fighting for the benefits of marriage, but for its responsibilities and obligations. Getting married means no simple break-ups; state laws will guide divorces, especially when terms are contested. Getting married means financial futures will be joined, with each person obligated to care for the other, each person impacted by the financial status of the other.

    The "expert" says the tax of impact on dual $400K earners, "That’s kind of brutal." But, any such couple who married and is then surprised that they're going to be treated the same as all other married couples simply wasn't paying attention.