Registered Domestic Partners

In a landmark decision, the California Senate passed SB1827,
which in part requires RDPs to file their CA tax returns as married for the year 2007.
Registered Domestic Partners , as well as tax preparers, are now concerned
about the tax issues that will be triggered by this historical event.

Can I just ignore this and file my California return like I file my federal?

No, because registering as a Domestic Partner has benefits and consequences. Filing the California tax return as married may be a benefit in the saving of tax dollars. Also, the State will be matching those names in the Secretary of State Registration program against tax returns.

We use separate tax preparers, and now we have to file jointly for California. How do we do that?

PATS will prepare a State of California return using each partner's federal return, whether it has been self-prepared using Turbo Tax or another paid preparer. Call for a consultation appointment or to ask questions.

What is meant by community property?

California is a community property state in that earnings during registration are considered to be earned by both partners. These earnings can be generated by employment, self employment, investments, and property that the partners own together.

If you use Married Filing Separately, each partner is required to file 50% of all community property income and deductions.

We have a prenuptial/postnuptial property agreement. How does that effect our filing status?

An agreement to keep identified property as separate results in property being held outside the community property rules. Under these circumstances, the partners file as Married Filing Separately. The community earnings are split evenly between the partners, and the partner with the separate property reports the earnings of that property entirely. Community property deductions are also split evenly between the partners.

What if only one of us itemized deductions on the federal return?

Taking the standard deduction or itemizing is really determined by who creates the largest tax deduction when your status is Married Filing Jointly. The simplest methods is to take the standard deduction, but it is worth evaluating what the partner who filed standard can contribute to itemizing. Separate property deductions are taken by the owner of the separate property.

If you file with the status of Married Filing Separately, both partners must use either itemized or standard.

For additional support information, go to the Registered Domestic Partners of California website.

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