March 20, 2014
LGBT Practice Co-Leaders Nanette Lee Miller and Janis Cowhey, Quoted in Reuters Article, "How to Sort Through the Changes for Same-Sex Tax Filers."
By Amy Feldman
Married same-sex couples this year will file their U.S. income tax returns just like heterosexual married couples because of the Supreme Court's decision in June to strike down key parts of the Defense of Marriage Act.
For insight into how gay and lesbian couples should plan this tax season, we turned to Nanette Lee Miller and Janis Cowhey McDonagh, who head accounting firm Marcum's LGBT and nontraditional family practice.
Marcum started its LGBT practice in 2012, and it has grown rapidly as same-sex couples struggled to deal with the patchwork of financial rules.
"A lot of LGBT couples want the specialty we have, but some just want to walk into a friendly environment," McDonagh says. "I had a client who came in, and said: 'My last accountant didn't like me and didn't approve of me getting married.'"
Here is what McDonagh, who is based in New York, and Miller, who is in San Francisco, say will be different this year:
Q: Will married same-sex taxpayers, who previously were forced by the Defense of Marriage Act to file as single or heads of household on their federal returns, see their taxes go up or down this year? And under what circumstances?
Miller: If one has a salary and the other doesn't, they may save money. Otherwise, they will pay a little more. Equality means that they can all complain on the same issue.
McDonagh: The majority of my clients are two high-wage-earners, and they are paying a lot more to file joint rather than single (because they now are in a higher tax bracket).
Q: Will tax season at least be a little easier this time?
McDonagh: In some respects, it is easier. You don't have to decide who is the head of household and who is going to claim the child. Before, I had to ask who owns the house and who is paying the mortgage taxes. Sometimes one party owned the home and the other one was making the mortgage payments off of income, so no one could take the deduction.
We have a big client who filed joint for the first time this year. One had been married years ago and had capital losses for tax purposes from when he was divorced. He'd never generated the gains to use against it, and the other one was able to sell and generate some gains. As soon as they could file a joint return, they got back $85,000.
Miller: You can put that under the category of pleasant unintended consequences. Unlike the unpleasant unintended consequences.