UNIVERSAL CITY, Calif.--(BUSINESS WIRE)--The Federal government won’t allow gay and lesbian couples to marry – but they must file taxes as if they were under little-known recent changes to IRS tax codes that have left same-sex registered domestic partners in a state of confusion.
“An estimated 350,000 gay and lesbian couples are affected by these changes, but often even the IRS isn’t clear on its own rules, and that has created chaotic situations for many same-sex couples,” says Certified Public Accountant Elisha Wiesenberg, an L.A.-based tax preparer with Wiesenberg & Company, who specializes in tax issues regarding same-sex couples.
“The good news is, there are simple steps same-sex couples can take to make tax season a lot easier,” Wiesenberg says. Here are his top five tax tips for gay and lesbian registered domestic partners:
1) Consult with a qualified tax adviser
“At-home software programs are great for simple tax situations, but registered domestic partners can have enormously complicated returns,” Wiesenberg said. “The new Federal guidelines obligate RDPs and same-sex married couples to combine their income and split it. Most at-home tax software just isn’t capable of handling these situations.”
2) Understand your partner’s financial situation
If you don’t fully understand both partners’ financial situations, including income and debt, now is the time to have those conversations. “If you don’t already know everything there is to know about your partner’s finances, by the end of April, you will,” Wiesenberg says.
3) Put your financial documents together
You may keep separate financial records, but the IRS sees you as a couple; compile your documents as such. Keep items separate – but ready to be combined at a moment’s notice. Also make sure you have your RDP documentation available.
4) File powers of attorney and tax authorizations
Complete IRS Form 8821 and IRS Form 2848 and send them to the IRS prior to seeing a tax preparer. “You’re filing as a couple, but the Federal government and IRS don’t permit you to talk about each others’ taxes or make decisions without the proper authorizations,” Wiesenberg notes.
5) Get ready to take notes
Both spouses should be prepared to keep detailed records of their conversations – whether with a tax adviser or, especially, when communicating with the IRS.
Wiesenberg says his clients are often frustrated by the system in place for registered domestic partners and same-sex married couples, but advises that patience can pay off.
“On the whole,” he says, “the new rules offer a more favorable way to file, so think of this as a little bit of compensation for the complexity involved in preparing returns.”
This information is designed to be of general interest. Before acting on any matter contained herein, consult with your professional advisor.