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Tuesday, October 26, 2010

Lambda Tax Guide for California Same-Sex Couples

Lamda Lambda Legal has released Tax Guide Following Important IRS Acknowledgment of California's Same-Sex Couples. From the press release:

Lambda Legal has released a short guide aimed at tax professionals and California's registered domestic partners explaining the consequences of a significant shift in federal tax policy as they file their tax returns for 2010.

The change, announced earlier this year by the Internal Revenue Service, applies to California's registered domestic partners (RDPs) and also may apply to the state's estimated 18,000 legally married same-sex couples, as well as registered domestic partners in Nevada and Washington. In a change from the approach taken by the Bush Administration, the IRS will now recognize the jointly owned community property income earned by California RDPs, the same way it long has done for different-sex married couples who file separate federal income tax returns. Recognition of "community income" means couples each will report half of their combined income on their separate returns -- called "income-splitting" -- which can mean big savings for couples with wide disparities in income.

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Comments

Oh, great. Income splitting is back... the very issue which prompted Congress to introduce the "married filing jointly" return decades ago. So now the marriage penalty will be even more onerous, considering that RDP's will get the benefit of income splitting without the penalty of reduced standard deduction and so-forth.

Why can't non-queer couples split income and keep their personal deductions?

Posted by: Mehmet Ali | Oct 28, 2010 4:45:47 PM