Gay couples face higher tax bills

MOUNT LAUREL, New Jersey (AP) -- For gay couples, the April 15 tax filing deadline can be a reminder of the disparities they face, even in a nation that is becoming more accepting of same-sex couples.
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Beth Asaro and Joanne Schailey at their civil union ceremony in 2007.

Gay couples often pay higher taxes because they don't get the federal tax benefits that go with marriage. And for couples in state-sanctioned domestic partnerships, civil unions or same-sex marriages, filing federal income taxes can involve doing three sets of paperwork instead of one.

"It's a significant financial disability," said Beth Asaro, who last year entered into one of New Jersey's first legally recognized civil unions.

While the debate over government recognition of gay marriage is a political hot-button with arguments about morality, civil rights and tradition, the tax issue is a mostly practical one for hundreds of thousands of same-sex couples.

Most states ban gay marriage and don't recognize same-sex unions in any way. Only in Massachusetts can gay couples legally marry. Since 1997, nine other states and Washington D.C. started offering civil unions or domestic partnerships that give some or all the legal protections of marriage.

Those protections include allowing gay couples to file state taxes jointly -- and potentially save them money. But they can also make tax filing more complicated for the couples.

That's because the state protections do not help with federal taxes. Under the 1996 Defense of Marriage Act, the government defines marriage as being allowed only between a man and a woman.

"You're running one household," said John Traier, a partner in the Butler, New Jersey, accounting firm Hammond & Traier. "But the federal government and a lot of states treat them as two households." (MORE)