Well, almost nothing about SS benefits would surprise me (such as, minor children of current recipients get their own benefits, for reasons I cannot imagine). But in general, I believe the survivor benefit is primarily meant to benefit the classic (or legacy, whatever term you prefer) case of a widow who was a stay-at-home mom, she can get benefits based on her deceased husband's earnings record.
But if your own benefits are already higher than what you would get based on your deceased spouse, no you don't get both sets of benefits.
That's not true. The 35% tax bracket starts at about 350k income for both single and married filers. Suppose one spouse makes 350k and the other 10k. If they file single, the 350k filer is in the 35% bracket, whereas the other is in the 10% bracket (because of the standard deduction and exemption of about 8k). But if they file together, both are in the 35% bracket. In addition, it seems that they lose their exemption because: (a) the exemption is phased out above around 120k, and (b) is not allowed under AMT. (An aside: the phase out of the exemption is going away in 2010, but the AMT will increase, so I'm not sure it's go away at all :).
I'd go one step further. Thanks to the Bush tax cut, the standard deduction, 10% threshold, 15% threshold for married filers is double that for single filers. So there is no marriage penalty at lower incomes. The marriage penalty starts at the 25% bracket, for example when both spouses make more than $68,650. If two single people made a little over that, they'd be in the 25% tax bracket, but when married they will be in the 28% bracket. The California tax codes have no marriage penalty, or at least didn't until the millionaires tax. So I'd say that the federal 35% bracket should start at 700k for married filers.
In California, all the tax brackets for married filers start at double that of single filers. However, the mental health services tax on income over $1 million, makes the top rate now 10.55% and it starts at $1M for both single and married filers.
If that couple had an adopted kid, and the kid went to daycare, if married they could claim a federal 20% credit on $3000, and nothing on California (the dependent care is completely phased out for high income earners in California, whereas it is phased out to 20% at the federal level). But if they file single returns, then 10k person could claim the credit and get the full 35% of $6000 for federal, and even a credit on the CA return. Even that person could claim the full $235 exemption credit for the child, whereas if married the credit would be phased out.
Any examples? Apart from the survivorship benefit for social security, I can think of two more.
(a) Roth IRA you can contribute if you make 120k or less if single,
175k or less if married. So if one makes 140k and the other 20k, if single only the 20k person can do Roth. If married, both can do Roth.
(b) At some employers, you can cover your same-sex domestic partner for health insurance, but the extra amount that you pay is post-tax, whereas if it is a spouse the amount is pre-tax. And some employers won't even cover same-sex domestic partners.
Agree, this is the driving factor. It's about acceptance by society of their means of life. To me the ideal solution is for the government to not recognize heterosexual marriages; just have civil unions, period.
I read the text at that URL and see nothing there indicating that the ruling applies to same-sex couples residing outside the jurisdiction of the court that made the ruling.
I would be very surprised the ruling applied outside the jurisdiction, as that's very much not how the federal courts work.
To be clear, if the government appeals and LOSES their appeal at the next level, then the geographic applicability of the decision increases.
This is one of those charming idiosyncrasies of how our government works. The executive branch, which includes the justice department, is legally required to defend and enforce laws passed by Congress, so even if the executive branch (i.e., the president) doesn't agree with a particular law, it is still their responsibility to defend it in court.
Legally speaking, what they could do at this point is (a) accept the court's ruling and proclaim that they don't see any legitimate grounds for appeal, thus leaving the ruling applicable only to the limited jurisdiction of the court which made it, (b) appeal the decision with the hope and expectation that it will be upheld on appeal, helping that to occur by mounting a lackluster appeal, or (c) appeal the decision with the hope and expectation that it will be overturned on appeal, putting time and effort into trying to ensure that happens.
Given the president's position on DOMA, (c) is unlikely. Whether they'll do (a) or (b) depends on their calculation of how likely it is that the ruling will be upheld on appeal. There's lots of strategy and planning that goes into figuring that out, but it's by no means a sure thing.
The other interesting wrinkle is that they have to be very careful about just how far they take the appeals, since given the current makeup of the Supreme Court, it's a very large tossup whether the ruling will be upheld or overturned if it makes it there.
The opinion of a federal district court isn't precedent, merely guidance that may not be noted at an unrelated trial. It's unconstitutional with regard to the plaintiffs but no one else.
As soon as you bring up California, you have another issue that distorts the "marriage penalty" -- community property rules.
Recently the IRS counsel advised that despite DOMA, California RDP and SSMC must apply community property rules to their non-married-status federal returns.
This penalizes anyone with itemized deductions, which normally could be allocated (by simple tax planning) to the higher income person for federal purposes, generating a higher level of tax benefit. Under the new rule, RDP/SSMC have the worst of both worlds at the federal level -- almost like being forced to file MFS.
Yeah, I did see the withholding rates from my original search. What I'm looking for is there a proposition or law that increased the tax rates for 2010? Is it supposed to expire? Or is just withholding increased but the tax rate the same (9.55% for most people I know).
I haven't been in CA for a few years but I believe that withholding rates are not the tax rates. I vaguely remember that CA passed a law that increased withholding rates 10% starting in 2009 or 2010. So the highest tax rate of 10.55% (9.3 + .25 +1.0) gets multiplied by 1.1 to arrive at a withholding rate of 11.605.
Well, last year's (2009's) withholding rates turned out to be the tax rates - a 0.25% addition to every tax bracket across the board. I'm certainly not holding my breath on this one.
What do you mean by "last year's withholding"? The state sent out new employer withholding tables beginning Nov. 2009 as a result of the above referenced law, which aims to collect 10% more than the estimated tax due.
Prior to that, the withholding tables only factored in the 0.25% tax increase per bracket, but not the two-thirds decrease in dependent exemption credits. Also, tax bracket thresholds, indexed to inflation, went down, a hidden form of tax increase.
Employees can file a new withholding form to "undo" the effect of the increased withholding if they choose, although I suppose it would involve some manual calculations.
The withholding tables before Nov 1st, or beginning on or after Nov 1st? Or are you claiming that there was no change in CA withholding tables during 2009?
It's just like asking about federal withholding. If you referred to "withholding in 2009", would it be before April, or since? (Making Work Pay Credit changes).
Your comment doesn't seem to recognize that withholding tables can and do change during the course of the calendar year.
Do you agree or disagree that the current EDD-issued withholding tables for California reflect a 10% over-estimate based on current tax rates, consistent with current law?
A change at the very end of a year is usually effective for the next calendar year.
I cannot agree. I also don't disagree. I take this as a strong indicator that the actual tax rates have increased, as withholding at a rate which exceeds the actual tax rate may be unconstitutional (per the state's constitution) and is therefore prohibited. That leads me to conclude that the actual tax imposed has increased.
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here.
All logos and trade names are the property of their respective owners.