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Tax Services and Same Sex Marriages: What You Need to Know.

Tax Services and Same Sex Marriages: What You Need to Know

Major tax changes are coming to Colorado in 2014, including health care changes for individuals, families and small businesses. Another change is tax filing for same-sex marriages. Colorado does not recognize same-sex marriages, but the IRS and Treasury Department don’t see it that way. Recently, the IRS and Treasury Department issued guidance in response to the recent Supreme Court case striking down Section 3 of the Defense of Marriage Act of 1996 (DOMA), which defined marriage as the union of a man and a woman. If you are legally married under any state’s laws you will be treated as married by the federal government.

This applies for all tax purposes, including the following: Filing status issues, personal and dependency exemptions, standard deductions, employee benefits, IRA contributions and deductions, the earned income tax credit (EITC), the child tax credit and gift and estate taxes.

Your filing status is dependent on your marital status on the last day of the year. If you are married, you can file a joint return, or elect to file separate returns using the Married Filing Separately status. You are no longer a single individual for tax purposes.

The Department of Revenue has announced it will follow the IRS procedures. In general, Colorado income tax is based on federal tax laws and follows them in almost all situations. They are maintaining that position with same-sex marriages so if you file a joint federal return you will also file a joint Colorado return.

If you were married at the end of 2012, and filed your returns before September 16, 2013, you may, but are not required to, amend the return you filed as married filing jointly or married filing separately. If you filed after September 16, 2013, you may not file as a single individual.

Other Open Tax Years:
Tax years are generally “open” and can be amended for three years after the original due date, or the date they were filed. If your returns for 2010, 2011 and 2012 are currently open, it may be beneficial to amend those returns and file joint returns. It's important to note that if you choose to amend a prior year’s return, all items on the return must be adjusted to consistently reflect your marital status (i.e., married filing jointly or married filing separately). For example, if you amend a prior year tax return to be treated as married, you are treated as married for all items and issues related to the return.

One item to review is the treatment of medical insurance. If one employer provided medical insurance for both of you the coverage for the other person may not have been excluded from your income. Amending your return may allow you to recover the income taxes paid on the value of this coverage.

How to use this Information:
Major tax changes are coming in 2014, including changes in health care with the Health Care Reform Act. Contact KKB, your CPA expert for any Colorado financial planning services help you may need during the upcoming tax season. We’ll be sure to help you with these changes and help make your life better.

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