Tips for gay couples as tax time approaches

Tax laws weren’t written with LGBT families in mind, but there are ways to make them work for you

DAVID TAFFET | Staff Writer
taffet@dallasvoice.com

A new tax ruling in California that appears to be a first step toward federal recognition of same-sex marriage will actually cost gay and lesbian couples there more money, according to Jon Chester of Sterling Bookkeeping and Tax Service.

In that ruling, the IRS said that registered domestic partners in that state must file as married filing separately.

“Married filing separately is the worst way to file a return,” Chester said. “We’re going to recognize you, but we’re going to have you file in the worst way a married couple can file.”

Ron Allen

Married filing jointly, he said, usually saves the most money and that filing is something same-sex couples cannot do on their federal taxes.

The so-called marriage penalty has been eliminated because a married couple gets to deduct twice the amount of a single person.

“But married tax brackets are much wider and save,” he said, so married couples filing jointly enjoy a tax advantage.

Chester had some other tips for same-sex couples in filing their returns.

He said that to take anything other than a standard deduction of $5,400, you must itemize.

Those deductions include property tax, charitable donations and medical expenses.

Chester said that if you support someone, you could take a deduction for that person.

Married couples who are recognized by the federal government regularly take deductions for dependents. He said gay people often do not think of that.

The person might be a child or a domestic partner. Chester suggested deducting for a parent that you support, even if that person doesn’t live with you. A parent in assisted living whose monthly bills you pay, for example, qualifies as a dependent.

He said it’s usually better for the partner making less money to claim any investment income and for the partner making more money to take any losses. The amounts can also be allocated proportionally, as long as no more than the total is claimed between the couple.

Jon Chester

Ron Allen, a CPA who used to work for the Internal Revenue Service, said that when a same-sex couple is sharing ownership and deductions on property, do three things to make the tax return audit-proof. Make sure both names are on the deed and on the mortgage and make payments from a joint account.

He said that for an account to be considered joint for tax purposes, both partners should make deposits into the account during the year. He suggested that even couples that kept their finances separate should make common household payments from a joint account.

Allen said that tax laws were not written with same-sex families in mind, but we must fit the laws to work for our families.

For instance, Allen asked, who deducts a dependent child when Texas doesn’t recognize a second parent adoption? He said that he has seen a number of cases where the adoptive parent stays at home and the non-adoptive parent earns most of the household income.

The non-adoptive parent may take deductions for the partner and child but will bear an extra burden of proof that married couples don’t need.

Allen said that when he went into business, he saw same-sex couples that used his practice because it was a safe place to reveal their relationship status. Now, he said, many of his clients come to him because tax preparers outside the community don’t know what to do with same-sex families.

Allen said that CPAs now are included in confidentiality rules. If one partner brings him tax returns for both members of the couple, he legally cannot answer any questions about the partner’s returns unless he has a power of attorney or a signed document.

“It’s just another case of us having to do something special,” he said. “A husband and wife don’t have to do these things.”

Couples dealing with issues of joint home ownership or other joint assets, adoption and disability and dependency issues should see a CPA who is experienced in handling these issues for the LGBT community, Allen said.

This article appeared in the Dallas Voice print edition March 25, 2011.

—  John Wright

GLFD marking 10th anniversary of giving

Organization that channels LGBT donations to mainstream charities returns to Latino Cultural Center to celebrate milestone year

Tammye Nash  |  Senior Editor nash@dallasvoice.com

Keith Nix and Dick Peeples
PHILANTHROPY OF TIME AND MONEY | Gay and Lesbian Fund for Dallas President Keith Nix, left, and Board Co-Chair Dick Peeples say their organization earns visibility and respect for the LGBT community by turning charitable donations “pink.” (Tammye Nash/Dallas Voice)

It was 10 years ago that a new group called the Gay and Lesbian Fund for Dallas donated enough money to the fund to build the city’s Latino Cultural City that the group earned naming rights to the center’s outdoor sculpture garden.

Next Wednesday, Nov. 10, 10 years and more than $1 million later, the GLFD returns to the Latino Cultural Center to celebrate its 10th anniversary.

Founded by partners Enrique McGregor and Mark Niermann, GLFD’s purpose is to collect charitable donations from the LGBT community and then give those donations en masse to specific projects and organizations — all to increase the impact and visibility of the LGBT community.

“We are all about visibility and bridge building,” said Dick Peeples, GLFD’s board chair, of the organization’s mission. “The LGBT community is part of the community as a whole. We want the whole body to be healthy, and we believe it will be healthier when all its parts are recognized and given respect.”

Peeples said GLFD has three requirements that an organization or project must meet to be eligible for GLFD funds: It must be a nonprofit in Dallas; it must publicly recognize GLFD as the donor of the funds, and it must have a hiring nondiscrimination policy that includes LGBT people.

It was that last requirement that almost derailed GLFD’s plans to donate to the Parkland Foundation to help fund the Ambulatory Care Clinic at Parkland hospital. And Peeples said he is proud that it was GLFD’s insistence that requirement be met before funding the project that provided impetus for getting the hiring policy at Parkland changed.

“A new policy that would include LGBT people had been sitting on [Parkland CEO Ron Anderson’s] desk for awhile, and they just hadn’t gotten around to putting it in place. Our donation was the impetus for them to go ahead and get it done,” he said.

GLFD President Keith Nix stressed that the fund is about “philanthropy of money and time,” adding that over the course of the past 10 years, “We have been very careful to touch all areas of the nonprofit community — medical, the high arts, art, women, children, education. We really have run the gamut of all areas of need.”

GLFD raises and donates money in different ways. Often the organization mounts a campaign for a specific project — like Parkland’s Ambulatory Care Clinic or the Dallas Women’s Museum or the Latino Cultural Center. And about every other year, the organization holds large-scale special events to raise money for a specific organization or project.

But the fund also has ongoing bundling programs for the Dallas Museum of Art and KERA 90.1 FM, the local public radio station.

Peeples explained that those who participate in the bundling programs would likely have contributed anyway to the museum or the public radio station, “but those dollars wouldn’t have been colored pink. The power of bundling is that the museum or the radio station still get the money, but now they know that money came from LGBT people. And that kind of visibility helps break down stereotypes.”

Nix described it as a win-win-win situation: The institution gets the donations it needs; the individual donor gets the benefit of donating, i.e. membership in the museum or KERA, at the level of their specific donation, and the LGBT community, through GLFD, gets positive visibility.

“Every few months, when the KERA pledge drives roll around, KERA is very upfront about announcing the donations we give and using the name Gay and Lesbian Fund for Dallas,” Nix said. “And every time we have a meeting with KERA, I ask them if they have gotten any negative comments about our donations. And they always say no. I think the fact that they have never gotten one negative comment speaks volumes about the progress we are making.”

Peeples said he believes that progress is due in part to Dallas’ reputation as a business-oriented city.

“This city is business-focused. People have a business-like attitude, and this [GLFD’s donation model] is very businesslike. We want acknowledgement and respect for what we do for the city, and this helps us get that,” Peeples said.

GLFD’s current campaign is to raise money to fund the Dean’s Reception Room in Southern Methodist University’s new Simmons School of Education and Human Development. David Chard, an openly gay man, is dean of the new school.

Partners Enrique McGregor and Mark Niermann
FOUNDING PARTNERS | Partners Enrique McGregor, right, and Mark Niermann founded Gay and Lesbian Fund for Dallas 10 years ago.

Although GLFD initially sent out letters to the nonprofits in Dallas that qualified for GLFD donations, Nix said the group no longer has to go out looking for places to give.

“We haven’t had to contact an organization in four or five years now,” Nix said. “Now, they contact us.”

Peeples acknowledged that the economic recession of the past two years has made itself felt, saying that “we’re soliciting people to give, and the economy has made giving more difficult for a lot of people.”

But, Nix said, GLFD has continued to be successful in its efforts.

“We haven’t really seen any decline in our bundled giving programs with the Dallas Museum of Art and KERA. When KERA had shortfalls, they called us. And we came up with some matching funds programs that wound up being incredibly successful.

“And when we held our event at the Wyly Theater, we filled the house,” Nix continued. “We may not have filled the glass as well as we might have before. But we did fill the glass.”

One difficulty the fund has had, both men said, has been in finding the LGBT community and identifying the segments of the community that would be likely to give to specific programs and projects.

“The Dean’s Reception Room at SMU is a good example,” Nix said. “We want to find LGBT people who graduated from SMU or have some real connection to the school because they are the ones more likely to give to that project. But there’s no LGBT alumni group at SMU.”

Peeples added, “It used to be that our community was concentrated in the Crossroads area in Oak Lawn. But now, we are scattered out all over the Metroplex. And there is no database of gay people we can use to find them.”

But the two men hope that GLFD’s new membership initiative might help solve that problem.

“We don’t have a real membership, per se,” Nix said. “But with our anniversary event at the Latino Cultural Center, we will be launching a membership organization within the fund. You don’t have to be a member to give or to participate in our events. But just like with the museum and KERA, you can join, and you get benefits for being a member.”

There will be, he added, different levels of membership offering different levels of benefits.

“Just like with KERA, no matter how much you give, you’re a member. But if you can give more, you get more benefits. Still, whatever level you give at, you benefit. Everyone benefits,” Nix said.

GLFD’s 10th anniversary party begins at 6:30 p.m. Wednesday, Nov. 10, at the Latino Cultural Center. State Rep. Rafael Anchia will be the keynote speaker, and the event will include the premier of a short video on the history — and the future — of GLFD.

Tickets are $50, and are available online at GLFD.org.

Organizations and projects that have benefited from donations by GLFD include AT&T Performing Arts Center, Dallas CASA, Dallas Latino Cultural Center, Dallas Public Library, Dallas Women’s Museum, KERA 90.1 Public Radio, Parkland Health and Hospital System, Twelve Hills Nature Center, Bark Park Central, Dallas Children’s Theater, Dallas Museum of Art, Dallas Theater Center, Friends of the Katy Trail, Oak Lawn Triangle, The Stewpot, The Wilkinson Center and the Simmons School of Education and Human Development at SMU.

This article appeared in the Dallas Voice print edition November 5, 2010.

—  Michael Stephens