Marriage for straight couples provides a tax shelter because they are allowed to file a joint return. However, even in states where same-sex marriage is legal, the federal government does not recognize any form of gay union, due to the stipulations of the Defense of Marriage Act.
Because gay couples can’t file jointly, they can’t combine income and deductions to take advantage of lower tax rates. It’s also more difficult for them to qualify for some tax breaks because the credits are not allowed for single filers.
More than 12 states now offer full or partial marriage rights to gay couples, and a recent Gallup poll showed that a majority of Americans favor gay marriage.
The report was based on a series of same-sex versus opposite-sex couple’s tax scenarios. An equal household with one working parent earning $100,000 a year and one stay-at-home parent earning nothing produced radically different results.
Heterosexual couples file a joint return and divide their assets. Homosexual couples must file separately, with one “head of household” and one “qualifying relative.” In this scenario, the homosexual couple would owe $4,543 more. The gay head of household is also subjected to a tax on his or her partner’s health insurance premiums.
Gay couples that live in states where their marriage is recognized will also be forced to fill out twice as many forms, which often results in higher fees from tax preparers.