Thursday, April 7, 2011
Is This Fair?
Here's the deal: the federal government does not recognize our relationships, even if they are legal in a particular state, so even if we check "married" on our forms, we still must each file the federal 1040 separately. Then we need to figure out between us what is community property and what is NOT community property. Wages, for instance, are considered community property; the interest income on money I inherited from my Grandfather's estate would not be. Ultimately each of us will wind up with different figures for our adjusted gross income, neither of which will look anything remotely like what's on our W-2s. This fact alone will automatically trigger a form letter from the IRS, subjecting us to an audit.
At this point, nobody knows what's going to happen. We both sat in on the Webinar for gay couples in California (thankfully we can at least file a single state form as a married couple here), and the tax experts--local tax preparers familiar with the issue and even someone from the State Franchise Board--all agreed that the IRS Publication 555 was in error when it comes to our situations, and that really, the most any of us can do is the best we can figure. And to EXPECT to be audited.
You may ask, why not just go ahead and say you're single and just file separately like you've always done? Well, the answer is, I can't, and it would also be a lie. Since the IRS created this separate "community property" rule for gay couples (in the name of equality, bless 'em), legally we HAVE to file as a married couple. BUT, as I said above, since they don't recognize us as actually married, you still have to do two separate returns, when they don't have the structure in place to account for us. So it's a mess.
The moral of the story is: separate is not equal. Never was, never will be. Until gay marriages are recognized by the federal government, gay couples will be treated differently--either not eligible for the same tax breaks that heterosexual married couples get, or subjected to a dozen headaches and harassment from the IRS just for trying to be honest in preparing their taxes. Either that, or we can hire an accounting firm with an attorney on board for $300 an hour like we did last year--I think the total bill for both of us came to $2000 just because ours are so complicated. Turbo Tax can't handle us, either. And even if a tax preparer did our taxes, we will STILL BE AUDITED.
I ask you: is this fair?