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Taxes, Medicare and gay marriage

By Jennie L. Phipps ·
Tuesday, September 3, 2013
Posted: 5 pm ET

Older, married same-sex couples got good retirement planning news last week when in the wake of the Supreme Court's same-sex marriage decision in June, both the Internal Revenue Service and the federal Department of Health and Human Services set a "place of celebration" rule in recognizing same-sex marriages.

In other words, if a same-sex couple marries in one of the 13 states or the District of Columbia where same-sex marriages are legal, these federal agencies will recognize the couple as married even if they ultimately live in a state where same-sex marriage isn't recognized.

Here are some things to think about if you're affected by these decisions, particularly if you are nearing retirement.

Federal tax returns. Married same-sex couples can choose to file their federal taxes either jointly or married filing separately. If this is your first time filing as a married couple, it might be worth the time and trouble to run the numbers both ways and view the results. Filing jointly usually means your taxes will fall -- but not necessarily, especially if you both make similarly high incomes. "You really do need to crunch the numbers," says Carrie Schwab Pomerantz, senior vice president for Charles Schwab & Co.

Medicare. Same-sex couples can now take advantage of the benefits that marriage offers when claiming Medicare. That includes eligibility based on a spouse's work history and exemptions from any penalties for failing to enroll because your spouse has a workplace health plan. It also could mean that combined incomes will be considered in figuring Parts B and D costs, which could result in higher premiums for some people whose spouses have high incomes. Again, as Pomerantz says, "crunch the numbers."

Social Security. Currently, Social Security says it is still ironing out the issues resulting from the top court's same-sex marriage decision, but it urges people who think they may be eligible to apply right away. Social Security says on its website, "We encourage you to apply now to protect you against the loss of any potential benefits. We will process claims as soon as additional instructions become finalized."

Pomerantz advises a same-sex couple to get good ongoing legal and financial advice. "The implications of the Supreme Court decision are overwhelming, and they are going to continue to change," she says.

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