TurboTax Discriminating Against Gays (And Paying Customers, At That)

Stupid problem with a very simple solution – get a refund for the software. The company should let you return it and if they don’t then any and all customers experiencing this problem have every right to sue TurboTax, at the very least for the price of the software. There are anti-discrimination laws that are in place for situations such as this. So, everyone who has this problem, what you should do is find others who are having the problem and then you should all band together and file a joint lawsuit. There are several lawyers who will take on this case probono and several others who will take their fee from the settlement. their fee from the settlement.

So, I’m an accountant and have used and supported TurboTax for a long time. I was pretty incredulous when I read this post, so I decided to do some research on my own to find out what’s really going on here. It turns out that you can, under certain circumstances, receive the error message above. However, this isn’t really the fault of Intuit (the makers of TurboTax).

The Defense of Marriage Act defines “marriage” as being between one man and one woman on the federal level. That means that same-sex relationships are not recognized in any way by the federal government, regardless of what state you live in, the kind of legal relationship you have, or what tax benefits your state provides to you. In any case, the IRS is required to treat both partners as single.

As a result, you must prepare no fewer than three federal tax returns if you are a same-sex couple and want to take advantage of tax benefits offered on the state level. In this case, each partner must file an individual federal return with a filing status of “single” on his or her own, and then the couple must prepare either one “pro forma” federal return with a filing status of “married, filing jointly,” or two pro forma federal returns with a filing status of “married, filing separately,” depending on which status works best for the couple’s particular tax situation if they were treated as legally married under federal law.

Since there are several different versions of TurboTax available at a variety of price points, with the version you need to purchase dependent on the complexity of your tax situation, it can be a challenge to figure out which one you need. To complicate matters even further, there is a free edition available through the IRS FreeFile program that is subject to additional federal regulations.

The short version here is that the federally subsidized free edition does not support this type of tax situation, nor does the basic ($30) version of TurboTax. Couples who wish to self-prepare their returns need to purchase TurboTax Deluxe ($60) to be able to file their taxes this way.

I have a copy of TurboTax Deluxe 2010 (for MacOS X) installed on the computer I am writing this from, and although I received the error message when completing the pro forma return, I was able to prepare the required federal and state returns for a same-sex couple in a registered domestic partnership in California with no difficulty.

And, before anyone starts complaining about how they shouldn’t have to buy the more expensive version of the software because of their relationship status, you should know that I agree. You should also know that isn’t why the software costs more. The software costs more because it is more complicated to file your taxes in this situation. I also have to purchase the more expensive software because I own a home, which the $30 version can’t handle either.

Agreed. I think it’s important to note that you end up requiring more complicated software to file a more complicated return. The solution is repealing the Federal DOMA and making it so that married couples, regardless of orientation, can file their taxes easily and efficiently.

This is why we hire an accountant :/ This is why I will NEVER EVER deal anything with taxes <-is a math major

This isn’t a discrimination issue. This is a DOMA making everything complicated issue. Intuit (makers of TurboTax) have to follow the law when it comes to the how they make their software. Federal Law does not recognize same-sex marriages, civil unions or domestic partnerships. PERIOD. @BibleBeltAtheist has a very good explanation of what the actual problem is. As long as Intuit is refunding the purchase price I see no issue. You can’t expect a do it yourself tax software to be able to handle every tax situation, when your tax situation is more complicated because the Federal government says you are single and your state says you are married than It is going to cost you more to do your return. Avoid the issue and get CPA to do your taxes.

WRONG Biblebeltatheist, I have the most expensive TurboTax Deluxe for those with self-employment income and I receive the error message. You CANNOT e-file with TurboTax if you are in a same-sex or RDP in a community property state, it does not let you. That’s the point of this article.

Yes you can override certain spots and print the forms, but you have to file by mail, which is a headache and means many many more weeks to get the refund.

OH and btw, the interviews in Turbotax do not properly handle the RDP/marriage community property issues, so you’d have to use IRS guidance and search on the internet for calculate the values used to override the Turbotax values. This is why the error message says it recommends getting professional tax preparation services. Which seems to necessarily imply that TurboTax offers unprofessional tax preparation services. I agree, TurboTax = Unprofessional

Those in the tax preparation community have known about these community property issues in this ruling for a long time, and this ruling has settled a debate that has raged for several years now. No one was caught by surprise here, and TurboTax wasn’t either, they’re just copping out because its cheaper for them.

Next year, Taxcut!

Community property is a state’s issue. The federal government does not recognize same-sex relationships in any state thanks to DOMA. What that means is that same-sex couples are treated as individual, single taxpayers by the IRS. There is no reason that you cannot e-file a federal return for a single taxpayer, whether they are gay, straight, or otherwise.

In fact, I was able to get TurboTax to e-file the single returns for a same sex couple in an RDP in a community property state with no issue.

I would imagine that whether you can e-file a joint state return for an RDP in a community property state will vary by state, but in no circumstances can you file a joint federal return for an RDP in the United States, which is why you’re getting that error message.

I will agree that it is not at once obvious how to properly handle an RDP in TurboTax, but if you read the help and follow the instructions, it should work just fine.