3 Tax Tips for LGBTQ Americans

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Not all Americans have the same tax concerns. Keep reading for important tax considerations for those of us with unique financial needs. [[{“value”:”

In a perfect world, tax season wouldn’t be stressful at all — state and federal governments would tell us what we owe (or how much we overpaid) directly, and issue a tax refund or a bill, depending on your status. Unfortunately, that’s not the world we have, and so everyone you know gets to worry about calculating their income and expenses and showing their work every spring.

If you’re part of the LGBTQIA+ community, your taxes might be more complicated than the average American, due to the complexities of unique family and financial circumstances. Here are a few tips to ensure you pay your fair share of taxes for 2023 — and only your fair share.

1. Find a good tax professional

First and foremost, it really pays to have the right people in your corner to help you manage your financial situation. Tax planning should be a big part of that, especially if your family or financial situation is unique. The right tax professional can save you money on your tax bill and also set you up for successful money moves to reduce your tax bills in the future.

How do you find a good accountant? Start by asking the people you know and trust in your community. Ideally, it’s best to hire someone in your state (even if they’re not in your local area — they’ll still be experienced with state tax laws). Personally, I use an accountant in another part of my state, and we lean on technology (such as a documents portal on his firm’s website) to pass forms and information back and forth.

You can also use the IRS’s database of tax preparers to find someone local. Once you’ve got some prospects, ask questions. It’s a good idea to make sure you see eye to eye on communication (style and frequency). And ask about experience, especially if your family situation is outside the norm. A good accountant can be worth their weight in gold, especially if taxes stress you out.

2. Consider itemizing if it makes sense

Members of the queer community might have more opportunities to itemize on their tax returns, rather than taking the standard deduction. This is especially true if you’ve sought gender-affirming medical care, which certainly comes at a high cost. In fact, if you are itemizing on your tax return, you can deduct medical and dental expenses that come to more than 7.5% of your adjusted gross income (AGI).

But how do you decide if it makes sense to itemize? The standard deduction for singles for 2023 is $13,850 (more for other filing categories), so if you’re filing your taxes on your own and don’t have enough deductions to surpass that figure, take the standard deduction.

If you’ve got those big medical bills, or paid a lot in mortgage interest, or made a bundle of charitable donations, itemizing is worth exploring. Doing so will make your tax return more complicated, but you could also save money on taxes in the process.

3. Explore all available tax deductions and credits

This is another place where having a great accountant can really come in handy, but if you’re electing to go the DIY taxes route, tax software can help here, too. The best tax software programs pose a series of questions to users to suss out which tax breaks they might be entitled to. Plus, many of them offer access to a tax professional on demand, just in case you run into a thorny issue you can’t untangle on your own.

A tax deduction reduces the amount of your income that is taxable, while a tax credit reduces your tax liability. Some of these can be quite valuable. Tax credits you may want to explore include:

If you’ve adopted a child, dig into the nonrefundable adoption credit — your expenses along the way can reduce your tax bill.Queer folks face higher rates of poverty and we earn less on average — but if you qualify for the Earned Income Tax Credit (EITC), it may be able to help you stay afloat.Going back to the expenses of raising children, you have access to the Child Tax Credit even if your family looks nothing like Leave It to Beaver. Just be sure to review the qualifications carefully, as things can get complicated for multiple families co-parenting children.

The odds are good that your status as a queer American makes a lot of aspects of life more complicated (and perhaps, that much more rewarding). But there’s no reason to panic about tax season. Take a deep breath, find the right help, and ensure you’re finding all the tax deductions and credits you’re entitled to.

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