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Are Joint Taxes But Separate Finances Smart?

  October 13, 2020  |    #Tools

Joint taxes and separate finances

For LGBTQ married couples who normally keep their finances separate, the prospect of filing joint taxes may seem complicated. How do you divide the taxes you owe in a way that’s fair to both of you? Get all the answers here.

Hear Harvey’s advice for LGBTQ couples filing joint taxes

What to consider when filing joint taxes

Harvey Susnick is a Partner at Berdon LLP, a leading accounting and advisory firm based in New York City. Harvey has four decades of experience as a CPA, running his own firm for 20 years before merging his practice into Berdon in 1998. He leverages his financial expertise to help individuals, families and couples (traditional and LGBTQ) make informed decisions and create retirement plans that align with their goals.

On this episode of Queer Money®, Harvey joins us to address Queer Money® listener Ben’s question around filing taxes as a married couple—when you normally keep your finances separate. He explains the pros and cons of filing jointly versus separately, describing how a couple’s income differential might impact their decision. Listen in for insight on what to consider when you or your partner are a 1099 employee and get his top money advice for married LGBTQ couples.

“One of my strict rules has been that one doesn’t make life decisions based on taxes.” - Harvey SusnickClick To Tweet

Topics covered on filing taxes jointly

How to decide if you should file taxes jointly or separately

  • Filing jointly = same or better in most cases
  • Difference negligible if both have similar income

Harvey’s options for couples who keep their finances separate

  1. Base tax responsibility on income split
  2. Pay extra to file separately (if make similar income)

What to consider if you or your partner are 1099 employees

  • Set aside money biweekly to cover taxes
  • Responsible for all 12.4% (no employer match)

How much 1099 employees should set aside quarterly for taxes

  • Divide previous year’s tax liability by 4
  • Use the tools at Credit Karma Tax

Harvey’s money advice for LGBTQ married couples

  • Discuss finances to be sure on the same money page
  • Don’t make life decisions based on taxes

Our tax advice for Ben and his partner

  • Base taxes owed on income split (45% and 55%)
  • Assess what each paid over the year

Connect with Harvey

Resources for finances

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