You've probably already heard about the U.S. Supreme Court decision to strike down the Defense of Marriage Act (DOMA), allowing legally married same sex couples to be recognized as married for federal tax purposes.
As a part of this ruling, couples have the option to go back and amend their last three years tax returns, if they would have received larger tax refunds by filing a joint tax return. However, most people don't know whether it is financially beneficial to amend their returns or how to find out.
If you are not sure how amending your previous years tax returns will benefit you, you can check TurboTax new online decision tool to help you figure out if you have a refund coming for previous years and how you can easily file your amended tax returns.
Some of the tax benefits that legally married same-sex couples may now have at their disposal for 2013 and on their amended tax returns are:
Deductions and Credits for Dependents -- If you file married filing jointly, you will be able to take tax deductions and credits for your children, other dependents, or your spouse.
• Dependency Exemption -- The dependency deduction may mean an additional tax deduction of $3,900 per dependent and an additional $3,900 exemption for your spouse.
• Earned Income Tax Credit -- When you file as a married couple you may be eligible for an Earned Income Tax Credit worth up to $6,044 for 2013.
• Education Credits and Deductions -- Education is expensive, you may be able to claim a tax deduction on your taxes of up to $4,000 for your dependent or spouse's education.
Lower Tax Rates When Filing as a Married Couple
• There may be a possible reduction in your tax liability since tax rates are typically lower for couples filing married filing jointly. A married same-sex couple who earns $80,000 per year may see savings of at least $500 when filing jointly without considering additional deductions they will be entitled to.
Easier Tax Preparation and Savings on Costs
• Legally married same sex couples will have it easier when it comes to filing their taxes. A couple who previously had to file two separate federal taxes can now file one joint federal tax return. Same-sex couples may also save on tax preparation costs since they no longer need to pay high fees to have someone else prepare multiple federal and state tax returns. Instead, they can easily prepare one federal tax return and possibly one state return, together with tax software.
Savings for Your Families
• A surviving spouse in a same-sex marriage can now take advantage of the estate tax marital deduction, which allows an unlimited deduction from the gross estate of property passing to the surviving spouse.
• Legally recognized same-sex couples can now gift money and take advantage of a doubled annual gift tax exclusion of $28,000).
The ruling does not apply to registered domestic partnerships, civil unions, or similar formal relationships recognized under state law.