Hot Taxman-on-Man Action
It's a Good Year for Homos Paying Taxes and Moving to Washington
Whether you're gay yourself or just love keeping tabs on gay triumphs and struggles, a few items of gay business demand your attention this month.
First, gay money! As you are aware, the Feds want to know how much money you owe them by April 15, tax day. Turns out, this is a great year to be gay and owe taxes—if you're in a domestic partnership registered in Washington State.
Take state representative Jamie Pedersen (D-Seattle), who is gayer than a Care Bear dipped in sprinkles, is in a registered domestic partnership, and saved a bunch of money this year because of a new IRS interpretation of complicated tax laws relating to community property.
"We are the classic example of where it makes the most difference," Pedersen says, speaking of himself and his partner, Eric Cochran Pedersen, a stay-at-home dad who has no job income. In the past, the IRS didn't allow same-sex domestic partners to treat each other's income as community property for tax purposes. But now it does. So instead of Pedersen getting taxed at a high rate for filing all of his professional income from his law practice and his work in the state legislature as his income alone, now Pedersen's income is taxed as community property in his relationship with his partner. Meaning, it's split evenly between the two of them for federal tax purposes, which considerably lowers their family's overall tax rate.
"It makes a huge difference," Pedersen says, though he points out that he doesn't see it as extra money. "It just shows how much of a penalty we have had because the federal government hasn't recognized our relationship." (Peter Renn, a staff attorney for gay rights advocacy organization Lambda Legal, adds that this isn't exactly a crumbling of federal discrimination against LGBT couples. "The federal government here isn't actually respecting the relationship, but rather respecting the primacy of state property rights laws," Renn says. "That's why the IRS development doesn't violate the federal so-called Defense of Marriage Act.")
But experts caution: Don't try to take advantage of this new tax rule alone! (Really, this shit gets complicated.) Use a professional tax planner.
Second, gay marriages from other states! Thanks to a law pushed through the state legislature this session by Representative Laurie Jinkins (D-Tacoma), couples who got gay married in some other state or country will now automatically have all the rights and responsibilities of domestic partners in this here Washington State. You know: hospital visitation and decision-making rights, use of sick leave to care for a partner, the ability to leave and collect inheritance, etc. "It was a problem for the many couples who were married in their home states and then eventually relocated to Washington," says Josh Friedes, spokesman for the gay advocacy group Equal Rights Washington. "They didn't realize that their marriage wouldn't be respected in Washington."
Also remarkable: Five Republican senators voted for this bill, including all of the new Republicans from the east side of Lake Washington and Senator Dan Swecker (R-Chehalis), who in the past had been a stalwart opponent of domestic partnership rights.