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L Dietz CPA
L Dietz CPA, Accountant
Category: Tax
Satisfied Customers: 31
Experience:  Tax accountant with 27 years experience.
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Help with the domestic partner income tax

Resolved Question:

Attachment: 2011-12-01_024521_taxes1.doc

I need help with the domestic partner income tax. Does it help me with taxes or not? im including an attachment so it can be better understood. A portion of the pretax deductions for benefits are being transferred to the after tax deductions because the IRS looks at domestic partner/child as an after tax deduction. My question is that since my fed taxable gross is more than my actual gross, then are they withholding more taxes because of the higher taxable gross? And does it help that the domestic partner income amount added every pay period to my gross help with filing taxes as this amount would increase the total wages when filing at tax season?
Submitted: 2 years ago.
Category: Tax
Expert:  L Dietz CPA replied 2 years ago.

Hello and welcome to Just Answer. I have 20 plus years experience in all areas of US taxation including multi-state and international issues.

 

Yes, the federal tax withholding is increased due to the higher Federal taxable gross income, and the higher taxable gross income will be reported in Box 1 Taxable wages on your Form W-2. My understanding is that registered domestic partners in community property states such as California must each report half the combined community income earned by the partners. Therefore, you and your partner will each report 50% of your combined total income, in addition to any separate income you may have.

 

Since I don't know your personal tax situation, I can't tell you if you are receiving a benefit from this. If each of you earn about the same amount of wages, there probably won't be a significant difference in what you would normally pay in taxes. However, if one of you earns substantially more than the other, then the one earning less will be paying more in taxes, and the one earning more will be paying less. This may still provide a benefit when you look at the combined taxes for both partners and what the combined tax would have been without dividing the community income.

 

Since you do have a dependent child, the best tax benefit would probably come from being able to claim head of household status, but this means that one of the partners must be able to show that they provided more than half of the support of the child. For more information you can see IRS Publication 555, Community Property and the FAQ at http://www.irs.gov/newsroom/article/0,,id=245869,00.html.

 

I hope this helps you with your question. Please let me know if you need further assistance.

 

 

 

L Dietz CPA, Accountant
Category: Tax
Satisfied Customers: 31
Experience: Tax accountant with 27 years experience.
L Dietz CPA and other Tax Specialists are ready to help you
Customer: replied 2 years ago.

I m the only one that has a job at this time and we're not registered domestic partners. My fiancee has a medical condition and not working at the moment, but she will after the surgery. My question is that the domestic partner imputed income tax that is added to my gross on my current pay statement; are the tax withhholdings calculated using my current fed taxable gross of $1516.18 or the (1426 gross minus the pretax deduction) 1387.22? Do i benefit from the added imputed tax on my gross for increased wages reported on box 1 on the W2 or should i remove the imputed tax to reduce the total gross wages on the W2?

Expert:  L Dietz CPA replied 2 years ago.

You will need to verify with your employer exactly how and why they are computing the "Domestic Partner Imputed Income Taxable" amount of $128.48. It appears to me, however, that this may be related to your life insurance coverage for your dependent child, dependent spouse and your optional life insurance coverage. When your group life insurance coverage exceeds $50,000, there is a small add-back amount to taxable wages at the end of the year, not for each pay period. This amount is included in gross taxable wages on your Form W-2, Box 1 and must be included in your taxable income on Form 1040. While there is a small tax cost from this add-back amount, you are still benefiting from your group rates for the life insurance coverage.

 

I hope this information helps you with your question. Since you have already accepted, there is no need to accept again for this question.

L Dietz CPA, Accountant
Category: Tax
Satisfied Customers: 31
Experience: Tax accountant with 27 years experience.
L Dietz CPA and other Tax Specialists are ready to help you

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L Dietz CPA
L Dietz CPA
Tax Professional
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Tax accountant with 27 years experience.