domestic partners and taxes?

Question

ok... we are engaged and we live together, but we wont be married for another year.... now he doesnt get medical benefits at his job.... so i want to claim him as a domestic partner and but him on my medical benefits..... does that affect how i do my w4 or any other tax form... if so.... what is different

if it matters... we live in texas

Answer 1

If you add your domestic partner to your company health insurance, your premium will be higher. If you pay the premium, and normally itemize your deductions, then the higher medical insurance premium will lower your tax liability a little bit. You probably wouldn't change your w-4 because of this.

However, if your employer pays the premium for the plan covering your domestic partner, then that entire premium amount (including any contributions you have made), is treated as taxable income to you.

Where the employer provided coverage to you alone, and that premium amount was excluded from your gross income, the employer now pays the premium where your domestic partner is covered, and the increase in gross income can be thousands of dollars. You would probably need to change your w-4, in such a case.

http://www.unmarriedamerica.org/members/news/2005/May-DP/surprise_taxes_due_on_partner_benefits.htm

http://dev.hrc.org/issues/workplace/benefits/4820.htm

Your w-4 tells your employer how much you want withheld each paycheck. There are w-4 planners that can help you with the calculations. Here's the IRS withholding calculator:
http://www.irs.gov/individuals/article/0,,id=96196,00.html

It's possible your employer has additional benefits, or other fringe benefits where your domestic partner can be included. Dental, vision, life insurance, for example. These plans do not lower your tax liability. It's possible that receiving certain additional benefits or fringe benefits beyond health insurance could further increase your gross income. Your HR department can help you, and also the IRS website: http://www.irs.gov/individuals/index.html

If you have a health savings account (HSA) at work, or other tax favored plan, it is limited to yourself, your spouse, and your dependents. You cannot add a domestic partner to a tax favored plan, unless he qualifies as a dependent (he would have to have minimal wages, and you would have to be providing more than half his support).

Be very careful to read the papers and domestic partner affidavit you might be required to sign before adding your fiance to your health insurance. The domestic partner affidavit may bind you financially in ways you do not expect, even if you incur a break up in the future, and are never married.

The State of Texas does allow common law marriage. Check with an attorney as to how signing a domestic partnership agreement differs from being considered married.

Declaring and holding yourselves out as a married couple, under common law marriage rules, you could both file a joint tax return with the IRS, and your tax situation would probably change dramatically. (Also, your health insurance would cover your spouse, instead of your domestic partner, and the cost of employer paid health insurance would stay excluded from your gross income.)

Of course, getting married, or declaring yourselves married under common law marriage rules, for the purpose of improving your tax situation is not, in my opinion, the wisest of decisions :>))

Good Luck.

Answer 2

If your employer allows you to put him on your medical, you can do that, but that doesn't affect your W-4 or your taxes. You'd both still file as single.

What's different is that the medical insurer makes the rules for the insurance, but the feds congress) make the rules for taxes.

Answer 3

Doesn't have anything to do with taxes. Does your employer cover domestic partners? Not everyone does.

Answer 4

Previously answered. Please go back and re-read your last question.

Getting him on your medical coverage has NOTHING to do with YOUR taxes. They are totally separate and distinct issues. PERIOD.

If your employer covers domestic partners, just go to your HR office and add him. If your employer does NOT cover domestic partners then the ONLY way he can be covered is AFTER you are married.

Answer 5

does not affect your federal taxes in any way. if your employer allows this - good luck.