On July 24, 2011 the Marriage equality act was passed giving Same-Sex couples in NYS the right to marry.
Couples married as of December 31, 2011 in NY or in any other state or country that recognizes same-sex marriage will be considered married for the entire year, which means they MUST file a NYS Joint tax return or file as Married Filing Separate.
Not to spoil the excitement, but same sex married couples will not have it easy when filing their income tax returns for 2011. Filing taxes for same-sex spouses will be more complicated since the federal government does not recognize the marriage. To prepare your NYS Joint Tax Return, your tax accountant will need to prepare a “dummy” federal tax return using a married filing status so that your credits, income and deductions flow correctly. Many individuals will face higher tax preparation fees do to the complexity and time involved to file the tax returns.
The good news is that Same-Sex couples may have some tax advantages when filing their Federal tax returns. Some key strategies is shifting income to the spouse with the lower income or including deductions such as real estate taxes to the partner with the higher income. This shifting of income and expenses could generate significant tax savings for both partners. To best shift your income, consider holding your assets jointly. Your tax advisor will carefully consider these strategies when preparing your tax returns.
Please contact us if you have any questions or concerns.