4 Months Later: Revisiting Same-Sex Marriage Benefits
As of June 26th, 2015 all states in America must legally recognize same-sex unions. Did you know same-sex unions have been legally recognized in Florida since January 6, 2015 due to the ruling of Brenner v. Scott. The result of these cases allow married same-sex couples to receive the same benefits as married opposite-sex couples.
The supreme court ruling in June recognizes that same and opposite-sex marriages are treated equally and each member is recognized equally as American.
In addition the benefits of equality, dignity and progress, let's review some of the financial benefits married couples receive.
Jointly Filing Taxes
As a married couple, you may stand to save thousands of dollars on your taxes. Those who benefit the most from filing jointly are usually in a marriage in which one member makes significantly more money than the other. If one person in the marriage does not work and the other contributes 80% - 100% of the couple's income, filing jointly will likely save you a lot of money.
On the other hand, if both people in the marriage make roughly the same amount, you may find you save money filing separately.
Why? It has to do with your tax bracket.
If a married couple files their taxes jointly, the total amount filed will either be combined or distributed. If two incomes are combined, you may face a tax penalty. If the incomes are distributed, you may get a tax bonus.
Combined income would place the couple in a tax bracket together and would pay taxes as one. Distributed income would place the couple in a tax bracket as two people. In this scenario, they would both pay taxes based on the higher tax bracket.
As with any tax conversion, it's never simple. Talking with an accountant during any life changing event such as buying a house, changing jobs or getting married is always recommended.
The recent same-sex marriage rulings have impacts on employer benefits, such as health and life insurance, for each spouse. Each spouse is now eligible to receive employer benefits as long as the employer supports your spouse (regardless of gender).
It is recommended that both you and your spouse review the benefits offered by each employers.
Estate Planning Benefits
Same-sex spouses may not receive the benefits of estate planning for married couples. For any married couple, it is very important to immediately update the beneficiaries on life insurance, IRA, 401k, wills and other estate documents. Without updating these documents, your property and other assets may not end up in the hands you want if something terrible happens.
When your new spouse inherits your retirement savings accounts, they do so as if it were theirs all along. This allows your beneficiary to distribute and manage the accounts based on their life expectancy. If your estate documents are not updated, other family members or former spouses may be eligible to receive your property and accounts.
Are you newly married? Reporting to the IRS your name change, new filing status, tax withholding and more should be done as soon as possible.
We've provided these tips for newly weds in a previous post.