| Taxes have become a major financial issue for | | | | Be Prepared for Anything |
| members of the LGBT community over the years. 11 | | | | When living with a partner that you cannot legally |
| million unmarried couples living in this country are | | | | marry, it is important that you are both vigilante when it |
| missing out on the over 1,100 federal laws benefiting | | | | comes to your finances. No one wants to think it, but if |
| married couples. For this reason, many couples around | | | | your relationship ends, you are not protected the same |
| the country get stressed every tax season with the | | | | way as a married couple is for purposes of dividing |
| task of saving on their taxes, without the benefits of | | | | assets. If there is no agreement governing the |
| federally recognized relationships. | | | | relationship, asset ownership is pretty much going to |
| Mortgages | | | | come down to who bought or funded what. This may |
| When it comes to mortgages, the best way to save | | | | not seem fair, as you may have made purchases |
| money on your taxes is to plan in advance which | | | | based upon who benefited most, taxes-wise. When |
| person should take the mortgage out. If you are | | | | you begin building up many valuable assets, hiring a |
| making $45,000 a year and your partner is making | | | | lawyer to draw up documents is smart. Consider |
| $150,000, it makes more sense for your partner to | | | | entering a cohabitation agreement to govern your |
| take out the mortgage. This is because the higher | | | | finances during the relationship and providing the |
| income-earning partner can then claim the mortgage | | | | framework for splitting assets if your relationship goes |
| interest deduction over the years, and save more due | | | | sour. |
| to being in a higher tax bracket. | | | | Asset Shifting |
| LGBT Friendly Help | | | | You should also consider moving assets between you |
| Ask friends, family, and community members if they | | | | and your spouse to save on interest. Since you have |
| know of a tax professional that specializes in LGBT | | | | the lower income ($45,000), you will want to shift more |
| taxes. When it comes to taxes for unmarried couples, | | | | income-earning assets towards yourself. This way, |
| you can use all the advice you can get! Most tax | | | | you will be taxed at a lower rate on the income |
| professionals will be able to help you to some extent, | | | | earned than your partner ($150,000) would. The ability |
| but having a specialist in your area ensures you are | | | | to asset shift is actually a huge benefit when |
| doing all you can to make your taxes as low as | | | | compared to married couples, who cannot asset shift |
| possible. It also improves your chances of taking | | | | if filing jointly. |
| advantage of any benefit you do get. | | | | Inheritance Taxes |
| Gift Tax Exclusion | | | | If you and your partner are registered civil partners |
| A married couple has the great benefit of being able | | | | and your partner passes away, you do not have to |
| to give gifts to each other without having to pay gift or | | | | pay inheritance taxes at all. However, if your state |
| estate taxes. Unfortunately, couples within the LGBT | | | | does not recognize registered civil partners, your |
| community cannot do the same. There is however, the | | | | partner may, in fact, be subject to estate taxes before |
| annual gift tax exclusion, which when used properly, | | | | the bequest. |
| can make up for some of this injustice. The annual gift | | | | Separate Accounts |
| tax exclusion allows you to gift $11,000 worth of | | | | Separate accounts will simplify financial management |
| assets without paying taxes on them. | | | | for you and your partner. You may also consider three |
| Charity Contributions | | | | accounts—one account for yourself, one for your |
| Charitable contributions can greatly help you reduce | | | | partner, and one joint account. Use your separate |
| your tax liability. Much like the mortgage interest, you | | | | accounts to pay individual bills and taxes from. Also, |
| are going to want the partner with the highest income | | | | use the separate accounts to deposit your income into. |
| making your charitable contributions—and getting to | | | | Then, each of you can fund the joint account to pay |
| claim the resulting deduction. | | | | shared expenses (e.g. groceries, trips, etc.). |