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William Byrnes (Texas A&M) tax & compliance articles

Posts Tagged ‘same sex couples’

IRS Video Helps Same-Sex Couples

Posted by William Byrnes on September 24, 2014


The new video, less than two minutes long, is designed to help same-sex couples file their federal income tax returns.

 

 

 

 

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Getting Married – How Must I Include the IRS In My Wedding Plans?

Posted by William Byrnes on July 28, 2014


Why would a taxpayer want to include the IRS in his or her wedding plans?  Well, “its the law”.

No, the taxpayer does not need to send a wedding invitation to the closest IRS office.  But a 2014 marriage results in changes to the new married “couple’s” 2014 tax filing and possibly amount owed in tax for 2014.  Whether the couple will owe more in tax each year, including the year of marriage, over that of the combined amount of each individual’s tax due, depends on several factors, such as whether both spouses have income and how much that income is.  In general, a married couple, when both spouses are employed, pay more income tax than if they remained single and filed individual tax returns.  Also, the married couple may owe, and may owe more, of the additional 3.8% Net Investment Income Tax.

The IRS’ Summer Tax Tip 2014-2 reminds taxpayers that marriage has certain tax consequences from at least a filing persepctive.  These include:

Change in filing status.  If a couple is married before, or even on Dec. 31, 2014 at 11:59pm, then for the whole year of 2014 for tax purposes the IRS considers the couple married. Thus, neither spouse may file an individual’s tax return any longer.  Instead, the married couple must choose to file your federal income tax return either jointly or separately (as a married couple) for 2014.

Same-sex married couples:  If the couple is legally married in a state or country that recognizes same-sex marriage, then the couple must file as married for the federal tax return. This is true even if you and your spouse later live in a state or country that does not recognize same-sex marriage.

Name change. The names and Social Security numbers listed on a tax return must match the Social Security Administration records. If a spouse changes the family name, then that name change must be reported to SSA.

Change tax withholding.  A change in marital status requires that a new Form W-4 for each spouse’s employer (Employee’s Withholding Allowance Certificate).  If it normal that when both spouse have income, the combined incomes moves each into a higher tax bracket for withholding at work.  Use the IRS Withholding Calculator tool to assist completing a new Form W-4.

Obama Care Premium Tax Credit changes in circumstances.  If a taxpayer took advantage of receiving the advance payment of the premium tax credit in 2014, then it is required to report changes in circumstances, such as changes in income, marriage, or family size, to the Health Insurance Marketplace.  Moreover, if one spouse will move out of the area covered of a current Marketplace plan, then that spouse must notify the Marketplace.

Address change for IRS letters.  A taxpayer has the responsibility to inform that IRS of an address changes.  To do that, file Form 8822, Change of Address, with the IRS.  Also, separately, the taxpayer should ask the U.S. Postal Service online at USPS.com to forward any mail sent to the former address.

2014_tf_on_individuals_small_businesses-m_1Due to a number of recent changes in the law, taxpayers are currently facing many questions connected to important issues such as healthcare, home office use, capital gains, investments, and whether an individual is considered an employee or a contractor. Financial advisors are continually looking for updated tax information that can help them provide the right answers to the right people at the right time. This book provides fast, clear, and authoritative answers to pressing questions, and it does so in the convenient, timesaving, Q&A format for which Tax Facts is famous.

Anyone interested can try Tax Facts on Individuals & Small Business, risk-free for 30 days, with a 100% guarantee of complete satisfaction.  For more information, please go to www.nationalunderwriter.com/TaxFactsIndividuals or call 1-800-543-0874.

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IRS Reports 131 Million Tax Returns Filed but Many Amended Returns Expected

Posted by William Byrnes on April 29, 2014


The IRS reported in its 2014-56 NewsWire that 131 million tax returns were filed by the deadline of April 15 for the tax year of 2013.  88% of these tax returns were e-filed of which 35% (almost 46 million returns) were filed by taxpayers from home computers.

But the IRS disclosed that it expects nearly 5 million of these taxpayers to file amendments to their returns by filing Form 1040X during 2014.  Generally, for a credit or refund, taxpayers must file Form 1040X within 3 years, including extensions, after the date they filed their original return or within 2 years after the date they paid the tax, whichever is later. For most people, this means that returns for tax-year 2011 or later can still be amended.

Thus far, the IRS has released 94,809,000 refunds averaging $2,686 each.  In all, the IRS has had to return almost $255 billion to taxpayers in the form of refunds of access tax withholdings.

Same Sex Couples Amending Returns

The IRS alerted same-sex couples to consider filing amended returns for past years.  A same sex couple, legally married in a state or foreign country that recognizes their marriage, is now considered married for tax purposes. This is true regardless of whether or not the couple lives in a jurisdiction that recognizes same-sex marriage.

For returns originally filed before Sept. 16, 2013, legally married same sex couples have the option of filing amended return to change their filing status to married filing separately or married filing jointly. But they are not required to change their filing status on a prior return, even if they amend that return for another reason. In either case, their amended return must be consistent with the filing status they have chosen.

If a taxpayer still owes tax for the year 2013, then read https://profwilliambyrnes.com/2014/04/15/4-tax-tips-if-you-cant-pay-the-full-amount-of-taxes-on-time/

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