Money Talks | April 9, 2015

By Melissa Myers and Michael J. Tucker, April 9, 2015.

Melissa Myers: Well, the height of tax season is almost behind us for 2014 filings.

Michael J. Tucker: What’s unique about this tax season is that 2014 was the first year many married Arizona same-sex couples are filing jointly for their federal and Arizona tax returns.

Myers: Right. Until Oct.17, 2014, when Arizona legally recognized same-sex marriages, couples that had married in other states had to file joint Form 1040 with the IRS and individual Arizona state returns.

Tucker: That rather cumbersome process required taking information from the couple’s joint federal return and extracting each individual’s income for the Arizona returns to reflect unmarried status.

Myers: There will be no more of that! Couples who married in 2014 or prior years in any state, now including Arizona, must now file joint returns for both federal and Arizona income tax. For 2014 and forward, the process should be much easier.

Tucker: A couple is treated as married for purposes of a particular tax year if they are married on Dec. 31 of that year.

Myers: We spoke with local tax professional Bob Lind, of Camelwest Tax Services, about his observations and experiences during this tax filing season.

Tucker: Lind notes a lot of confusion (and apparently some widespread internet rumors) wrongly suggesting couples that married toward the end of 2014 can choose to file taxes as unmarried, since they were not married for “most” of 2014.

Myers: Those who were legally married as of the end of 2014 and who nevertheless filed taxes as unmarried are technically filing fraudulent taxes, and they must amend their returns to correct that claim.

Tucker: Because 2014 was the first year for which many same-sex married couples filed joint income tax returns, some had interesting and perhaps unexpected results.

Myers: Depending upon their respective incomes, some couples experienced a “marriage penalty.”

Tucker: The income tax marriage penalty is not some new way to discriminate against gay people. For years, married straight couples that are dual income earners often owe more in income taxes than they would have owed if they hadn’t been married to one another.

Myers: Right. “Marriage penalty” describes the circumstances of a married couple that paid more in combined taxes than the total of what the two would have paid individually had they been unmarried. Lind elaborated further on this point and provided an example.

Tucker: According to Lind, “[s]ome parts of the inequity, referred to by many as the ‘marriage penalty,’ aren’t related to tax rates but rather certain peculiarities in tax law. For example, let’s assume a couple each has $80K of AGI, before claiming about $10K of losses from several rental properties they co-own and manage. If unmarried, they were able to use the rental losses to offset other income. But the ability to deduct such losses is generally suspended for those with AGI over $150K whether the return is for a single person OR a married couple. As a result they would not be able to claim that current deduction, increasing their income subject to tax by $20K.”

Myers: Among other surprises for same-sex married taxpayers this tax season, filing jointly instead of individually may have affected certain calculations for benefits such as healthcare subsidies, tax credits, education credits or federal student financial aid, if either spouse has children.

Tucker: If a couple is not yet married and is considering the financial and tax implications of a potential marriage, we suggest the couple first research the many details that may affect them. This may entail meeting with your financial, legal and tax professionals.

Myers: Some couples have been blindsided by unexpected tax consequences of marriage. Know what you’re looking at.

Keep reading Show less

National Margarita Day

A lot of us have really picked up an interest in tequila and it's no wonder. Its popularity is soaring in the U.S. and doesn't look like it'll be slowing down any time soon. The only contender would probably be whiskey. Meh, but they have their own day. Now, it's National Margarita Day and we put together some of the best margarita recipes around so you can pick one or maybe even all of them to try.

We have a few surprises in there too. Maybe it's not all about tequila but it certainly has a theme going on. Take a look at some of these great tequila brands and start making some amazing margaritas today!

Keep reading Show less
Photo by Scott Webb on Unsplash

Gender-Inclusive Universities and Student Privacy

For many students, attending university is a profound, often life-changing, transition. It is often the student’s first time living on their own without parental supervision. This lifestyle is also accompanied by a period of self-discovery, of defining and redefining a sense of personal identity largely independent of the influence of family and friends from home.

For students who are members of the LGBTQ+ community, this rite of passage can also be a deeply empowering one. Indeed, attending university may be the student’s first real opportunity to explore their gender identity in a safe, comfortable, and accepting college.

Keep reading Show less

José Cuervo's Reserva de la Familia agave fields

Disclaimer: My trip was provided courtesy of a press trip but all opinions about the trip and events are my own. Please note there are affiliate links and at no additional cost to you, I may earn a commission if you make a purchase.

I had the opportunity to visit Mexico for an event José Cuervo was putting on, the unveiling of their premium tequila brand, Reserva de la Familia. The trip was all about tequila, how to drink it properly, how to pair it with food, and of course, visiting various points of interest in Guadalajara while tasting tequila along the way.

Keep reading Show less