On Friday, June 26, 2015, the U.S. Supreme Court issued a ruling that legalized same sex marriage across the country. As same sex couples contemplate marriage, it is important for them to look at how tying the knot might affect their wallets. In many cases, the ability to file a joint federal return means paying more taxes, rather than less.
The Marriage Penalty is Real
Along with the right to marry comes the tax realities that go with it. A married same sex couple with kids before the ruling would file one head of household return and one single return. Doing this would often make them eligible for an adoption credit. When they go to file a joint married return, they may find their tax liability will be higher, and they may lose eligibility for some credits.
This may be a real financial shock to couples that were married in a state where marriage was legal, but resided in a state where it was not. In many cases, there are local and state tax provisions that apply to married couples that same sex couples have never needed to consider. Now they do.
While it may seem unromantic, it is wise for same sex couples who were already married or who are considering getting married to speak with a financial advisor as well as an attorney to see how the ruling would affect them financially. Every case can be different, so there it is best to consult with a professional to discuss your specific situation.
Financial Impact on the Economy
The same sex marriage ruling also has a significant impact on the economy, particularly the wedding industry. It’s estimated that same-sex weddings will bring an extra $2.5 billion dollars into the economy over the first three years they are legal nationwide. On the state level, another $47.7 billion could come in, and a considerable number of jobs will likely be created due to the ruling.
With the advent of legalized same sex marriage, there are also other considerations for couples that require legal representation. For example, it is a good idea to carry documents such as durable power of attorney, marriage certificate, and a health care proxy. Our attorneys at May, Potenza, Baran & Gillespie can help you with any and all of these issues. Call us today for more information.
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