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Tax fallout from fall of DOMA

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in Small Business Tax,Small Business Tax Deduction Strategies

The recent Supreme Court ruling striking down the Defense of Marriage Act (DOMA) will have wide-ranging federal tax implications. Significantly, same-sex married couples will generally be eligible to file joint returns.

Other distinctions in the tax law between married and unmarried individuals will come into play, including application of income tax rates, treatment of capital losses, credits for the elderly and disabled, and taxation of Social Security benefits.

The ruling will also have a major impact on estate and gift taxes. For instance, property transferred between spouses is generally completely exempt from federal estate and gift taxes, while a surviving spouse can use the remaining balance of a deceased spouse’s estate tax exemption. Expect more clarification from the IRS.

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