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TurboTax Reneges on Promise to Support New Same-Sex IRS Rules

by Terrence O'Brien on March 16, 2011 at 08:30 AM

TurboTaxTurboTax, and its parent company Intuit, had promised to modify its tax return software to include guidance for same-sex couples filing jointly in California, Washington and Nevada. On Friday, however, the company announced that it would not be providing those features, and that it may be necessary to seek the help of a tax professional. At issue is a new IRS rule that requires same-sex couples and domestic partnerships to combine community property income; but rather than filling out a single return as married couples do, couples must report half the value on individual returns. This does not pose a significant problem for couples with only W-2s taking the standard deduction, but becomes increasingly complicated as itemized deductions, pensions and investment income are added to the mix.

The new rules were not expected to be mandatory for 2010, so when the new IRS guidelines were published in late February -- announcing that the new rules would be in full effect for the April 18th tax filing deadline -- many professionals were caught off guard. In a statement, TurboTax Vice President Bob Meighan said that the change of plans wasn't necessitated by the complexity of the rules, but by the time required to make the new arrangements simple enough to follow using the company's software. Some customers are understandably angry with TurboTax and feel the company left them in a lurch. Intuit is offering refunds to dissatisfied customers who purchased the desktop software. Users of the Web-based tools only pay once a return has been filed. Most of TurboTax's primary competitors have also been unable to update their software to deal with the new rules, which leaves same-sex couples in the difficult situation of either handling their taxes themselves, or hiring a professional late in the tax-preparation season.

Tags: apps, financial, intuit, IRS, same sex couples, SameSexCouples, taxes, top, turbotax, web

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