- Gayer than a Care Bear dipped in sprinkles!
It 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.”
But isn’t Eric taking a tax hit? If he has no income, he wouldn’t owe any income tax. Filing jointly, now he owes half of Jamie’s. I think the net difference is minimal.
@2: Nope. In Pedersen’s telling, the net difference for the family as a whole is considerable.
Here’s the Slog tip I sent in on February 11. Apparently the Stranger thinks taxes aren’t news until the week of April 15.
Here’s a big deal for registered domestic partners: Each partner must generally claim half of the other partner’s income for the 2010 tax year, since it is considered “community property”.
http://www.lambdalegal.org/publications/…
Yes, Eric is “taking a tax hit.” But you are ignoring the tax savings on Pedersen.
I do taxes. I sure this is a lot of money saved. Or as Pedersen says, they are no longer penalized with.
@4: I’m glad these guys now have the option, but is the difference between filing as head of household vs. married jointly really “considerable”? Isn’t it closer to 1% of gross income?