The Faggot Penalty, or, how DOMA and the IRS conspire to screw you

[Pab Sungenis]

I remember back in the 1990's when the Republicans were whining and moaning about what they called "The Marriage Penalty," where married couples supposedly paid more in taxes.

Well once again this year, my husband and I find ourselves on the short end of the stick tax-wise. But it's not "The Marriage Penalty" that's shafting us, it's "The Faggot Penalty," one of the nasty side-effects of DOMA that doesn't get nearly enough publicity. If you're in a same-sex relationship, you're probably paying too much in Federal taxes and you might not even know it.

Here's how I first became aware of the Faggot Penalty: in 2007 Bryan and I made our relationship official in the eyes of the state, almost as soon as we could under the just-passed Civil Union law. The only reason we didn't register and have the ceremony performed on the first day it was legal was because we decided to hold back a couple of months, invite friends, and make our relationship as legal as we were allowed to do under the law on what we considered our 15th Anniversary.

When the time came to do our income taxes the following year, we had a bit of a surprise. Under New Jersey law we were married and required to file taxes as such, but Federally we didn't have that option. Since New Jersey's tax forms copy information off of the Federal return, this forced us to do five Federal returns instead of the two (or one, if filing jointly) that we would normally do. We had to do the two Federal returns, plus "theoretical" Federal returns for married filing jointly and two married filing separately. Then we could use those theoretical returns to do three State returns to figure out which option would be the best way to file.

A lot of extra work? Yes, but that's not the big problem. The big problem started when we actually started looking at those theoretical Federal returns to see what we would have ended up paying if DOMA wasn't in existence and the IRS would have to recognize us as a married couple. The bottom lines are shocking.

I'll use our 2011 tax returns, which we just finished and filed over the weekend, as an example because the figures are still fresh in my head. For 2011 my Federal tax refund is $468.00. Bryan's is $212.00. But when we calculated our "theoretical" Federal return for the state, we discovered that if it weren't for DOMA we'd be getting a Federal refund of $1,909.00.

That's right. If the Federal Government would recognize our Civil Union as a valid relationship, our taxes for the year would have been $1,229.00 less.

If you get a chance while doing your taxes (and you have time to kill and are a bit masochistic) try preparing theoretical Federal returns for yourself and your partner if you were allowed to be recognized as married. In a lot of relationships that mirror "traditional" marriages where one person is the main breadwinner, you'll find that you're paying considerably more in Federal taxes than you would be if your civil union or same-sex marriage was recognized Federally.

Always remember: we're not only treated like second class citizens, but we're charged more for the privilege.

[Not Me]

1. We meet with our tax guy tomorrow...

Living in Florida, we have no state income tax, so we don't need to do 'theoretical' forms for that purpose, but will anyway, as we are going to file our single forms under protest and attach the "Married filing jointly" forms to them.
We are in a bit of a legal predicament, because IRS requires us to file as single, but then requires that we sign the form verifying that all information given is true.

[MarkCharles]

3. Interesting and challenging paradox! Predicament is right!

Any tax attorney worth his/her salt would advise you both to file affidavits with the return, as "NB" to the line reporting marital status, indicating your acknowledgement of IRS rules, as required to file separately, and yet indicating spousal status as a same sex couple. This would be in the spirit of honest reporting, but, given the level of IRS agents' sophistication, or lack thereof, this would probably serve only to trigger a tax audit for both of you.

[gopiscrap]

2. This needs to be brought out way more...

and the LGBT lobby needs to put pressure on the DOJ, POTUS and IRS to change it...BTW: congrats on your relationship, blessings for a long life together!!!! We are just getting same sex legislation passed in WA state and will have to defend this year against a referendum put out by the christo-fascists fundies!!!

[libodem]

4. Anyone ask you to rephrase?

I got locked for saying homosexual sex.

And suggesting not all encounters are with in the bonds of marriage.

[soleft]

5. I'm getting killed ony my partner's medical benefits.

All the money my company puts towards her benefits is considered taxable income. So I'm getting taxed as though my salary was $6000 more than it really is.

[mitchtv]

8. me too

plus the tax requirements, single Fed; joint-state

[Pab Sungenis]

9. Yes, that's another problem with the tax code

and how it's stacked against our relationships.

That, however, might be easier to fix than filing status. Not for us, but for the government.

[libodem]

6. DOMA

Is a ridiculous piece of useless legislation. How did it ever pass? It is not fair to tax partners more

because they are unable to get married.

I want it to be understood I'm not homophobic dispite how my locked post was taken. I fully support the gay community.

The terminology in the OP says sticks and stones to a word usually reserved as a slur. When you own it it makes it less of a triggers to induce shame. Be proud and stand tall.

[dbackjon]

7. Same happens to me - $3000K a year