We know that the “filing status” of a taxpayer determines the tax rate applicable to particular increments of income. We also know that there are such things as a “marriage bonus” and a “marriage penalty” – depending on the relative income levels of husband and wife. We have already considered the relative burdens of each of the filing statuses. Now we briefly consider the rules that place a taxpayer in one filing status or another.
Married Filing Jointly and Married Filing Separately: Section 1(a) provides that married persons who file a single tax return and certain surviving spouses must pay an income tax at the tax brackets specified. For income tax purposes, state law determines whether two persons are married.
- In United States v. Windsor, ___ U.S. ___, 133 S. Ct. 2675 (2013), the United States Supreme Court held § 3 of the Defense of Marriage to be unconstitutional. States may choose to recognize marriages between persons of the same sex. Not every state does. The IRS has issued a revenue ruling to clarify its position.
The Service has determined to interpret the Code as incorporating a general rule, for Federal tax purposes, that recognizes the validity of a same-sex marriage that was valid in the state where it was entered into, regardless of the married couple’s place of domicile. …
Under this rule, individuals of the same sex will be considered to be lawfully married under the code as long as they were married in a state whose laws authorize the marriage of two individuals of the same sex, even if they are domiciled in a state that does not recognize the validity of same-sex marriages.
Rev. Rul. 2013-17. “Valid somewhere, valid everywhere.”
- Section 7703 states various rules concerning application of tax rules to marriage and separation. Read it.
- What is the rule established by § 7703(a)(1)?
- What is the rule established by § 7703(a)(2)?
- What is the rule established by § 7703(b)?
- Section 2(a) defines “surviving spouse.” Read it.
Section 1(d) provides that married persons who do not file a single tax return jointly (i.e., they are “married filing separately”) must pay an income tax at the tax brackets specified.
Head of Household: Section 1(b) provides that a “head of household” must pay an income tax at the tax brackets specified.
- Section 2(b) defines “head of household.” Read it.
- Can a married person be a “head of household?”
- Can a surviving spouse be a “head of household?”
Unmarried Individuals: Section 1(c) provides that every unmarried individual – other than a surviving spouse or head of household – must pay an income tax at the tax brackets specified.
Do the CALI Lesson Basic Federal Income Taxation: Taxable Income and Tax Computation: Filing Status