Filing separate federal tax returns vexes same-sex Iowa couples
Refunds would be much higher if couples could file jointly
Kris Hobbs-Thompson describes her marriage to wife Heather as “fake” because the federal government does not recognize same-sex marriage, but the tax implications of their status are very real.
More than 131,000 same-sex married couples nationwide, including a few thousand in Iowa, have been reminded of that with Tuesday’s deadline to file federal income tax returns.
They must file individual returns with the federal government and mark themselves as single even as those who live in the six states, including Iowa, and the District of Columbia where same-sex marriage is legal can file joint state returns.
Those couples say it makes the often unpleasant task of doing their taxes more time-consuming and expensive, can cost them money and is insulting.
The Hobbs-Thompsons, who live in Cedar Rapids and are both 36, were married last month, so they won’t deal with the tax issue until next year. But Heather Hobbs-Thompson played around with tax preparation software and found the federal refund for the family, which includes three children, would be up to $2,000 higher if they could file jointly.
“We pay taxes to the federal government, we do everything else that the government says we need to do for a regular married couple, but we don’t get recognized as a married couple according to the federal government,” she said.
It’s a growing issue nationwide as more gay people get married, said Michael Cole-Schwartz, spokesman for the Human Rights Campaign, the country’s largest lesbian, gay, bisexual and transgender civil rights organization.
Iowa, U.S. numbers
The 2010 census counted more than 131,000 same-sex married couple households in the United States. The gay-rights organization One Iowa puts this state’s figure at about 4,500 marriages since same-sex marriage became legal in April 2009.
“Tax time brings into clear focus the additional burdens that one set of married couples, gay couples, have to face that other couples don’t,” Cole-Schwartz said.
Thomas Peters, cultural director for the National Organization for Marriage, which opposes same-sex marriage, said what is unfair is Iowa residents not getting a chance to vote on same-sex marriage. The tax issue is part of that larger debate, he said.
“If we want to simplify the tax code, let’s allow the democratic process to work out over the underlying debate about what marriage is,” he said.
The Iowa House last year passed legislation calling for a statewide vote on constitutional amendment to ban same-sex marriage, but Senate Majority Leader Mike Gronstal, D-Council Bluffs, said he will not bring the measure to a vote and believes passing such an amendment would put discrimination in the Iowa Constitution.
The Internal Revenue Service says it is bound by the 1996 Defense of Marriage Act, which defines marriage as between one man and one woman in federal law.
Jason Dinesen, an accountant near Des Moines who has worked with same-sex couples, said federal law does make taxes more complex for gay people who marry.
Those couples fill out four returns: a mock joint federal return to get the numbers they need for their state return, and then two individual federal returns to be submitted.
Decisions must be made on who claims deductions for things like children, mortgage insurance and charitable contributions.
A big issue, Dinesen and Cole-Schwartz said, is health insurance. Say a man includes his husband on the insurance he gets from his employer. The couple pays income taxes on the value of that benefit, which Dinesen said can add thousands of dollars to their taxable income. Opposite-sex married couples do not.
Dinesen said some gay married couples may save money by filing separately, as some opposite-sex couples do, depending on their circumstances. Same-sex couples, however, do not have a choice on whether to file jointly or individually.
David Shafer of Iowa City said he and his spouse, Barry Randall, detest the extra time and money it takes to do four returns instead of two. But like many same-sex couples, the issue also bothers them on a personal level because it’s a reminder that the federal government doesn’t recognize their marriage.
“Before we were married (in 2009), it was just insulting that we had to file our taxes as though we were roommates,” said Shafer, 36. “Now they add injury to the insult by requiring all this additional work and expense.”
Defying the law
Some couples have defied the law and filed joint federal returns. The “Refuse to Lie” campaign offers advice such as filing two individual returns and adding a joint return or including an attachment saying they’re married.
Janelle Rettig, 46, and Robin Butler, 48, of Iowa City considered filing a joint federal return, but they decided against it because of Rettig’s position as an elected member of the Johnson County Board of Supervisors.
“They do force us to lie, and I have to check the box single,” Rettig said.
The National Organization for Marriage’s Peters said gay-rights activists are trying to create a “legal mess” to “push an agenda to offer a false solution.”The IRS said all taxpayers are expected to file complete and accurate returns, and one element for determining a penalty is whether an error was intentional.