The "All-American family" has changed a lot over the past 30 years. Family dynamics and structures have changed from the traditional married couple with 2.5 kids to single parents, step-parents, unmarried couples with children and two dads/two moms. Families are more diverse today than ever before... and the federal government now recognizes this.
Last week, the Department of the Treasury and the IRS ruled that married same-sex couples will be treated as "married" for all federal purposes where marriage is a factor. The only requirement is that they were married in states or jurisdictions that recognize same-sex marriages.
What Does This Mean for Legally Married Same-Sex Couples?
As of the 2013 tax year, same-sex spouses who are legally married will not be able to file federal tax returns as if either were single. Instead, they must file together as "married filing jointly" or individually as "married filing separately.". Those who choose married filing jointly will now be able to take deductions and credits for children and dependents as a married couple.
This ruling applies even if the couple lives in a state where same-sex marriage is not recognized - as long as they were married in a state where same-sex marriage is recognized. It does not apply to couples in registered domestic partnerships, civil unions, or similar formal relationships - which are recognized in some states.
Filing Amended Returns
This ruling is retroactive so married same-sex couples can immediately begin amending returns for 2010, 2011 and 2012 - as long as they were legally married during the year they are amending. Couples do not have to amend their returns if they do not want to.
The Marriage Tax Penalty
Filing joint tax returns isn't always a benefit because of "The Marriage Tax Penalty" for couples who tend to make about the same amount as one another.
The marriage tax penalty is a result of our progressive tax system. As your income increases, additional dollars are taxed at increasingly higher rates. When two people get married and file jointly, the income of the second spouse is added to that of their spouse - pushing the couple into a higher tax bracket.