Same-Sex Ruling Offers Tax Benefits to Couples

For many same-sex couples living in Minnesota, filing taxes in 2014 is going to be very different—and possibly much more rewarding.

The background: In May 2013, Minnesota moved to legalize same-sex marriage, paving the way for ceremonies to begin August 1st. Shortly after the state senate’s ruling, the Supreme Court ruled Section 3 of the Defense of Marriage Act unconstitutional, meaning that the federal government must recognize same-sex marriages in states where it is legal.

This means that same-sex couples in Minnesota who decide to get married will be allowed to file a joint federal tax return in April, as will other couples who are married in one of the 13 states where same-sex marriage is legal. They will also be eligible for many other financial perks of marriage, including:

  1. Possible tax benefits. Some married couples pay less taxes when filing jointly (this depends on each spouse’s income).
  2. Equitable estate planning
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Tax Credits for Summer Camps and Childcare

Summertime has a special meaning for children: bike rides, swimming, sleeping late, and most importantly, no school for two and a half months. But many parents—whose work schedule is unaffected by the changing seasons—dread the end of the school year, because finding summer childcare during the day becomes a difficult (and expensive) task.

Sound stressful? Don’t worry, there’s good news.

To ease the financial burden of summer expenses, the IRS offers special tax credits for qualifying taxpayers who pay for summer childcare. This means that the money you pay these next couple of months for daycare, summer day camps, and even in-home baby-sitters can help you earn a significant tax credit on next year’s return—up to 35% of what you pay now. This helps offset the cost as you go to work every day (or look for work, if you are unemployed).

Of course, there are certain rules that apply:Read More

Going Paperless

It’s an overused cliché in movies: a client arrives at his accountant’s office and dumps a shoebox full of receipts on the desk, fistfuls of white paper spilling over the sides. If you regularly keep receipts and documentation for tax write-off purposes, this scene may sound familiar. But it doesn’t have to be—much of our daily business has gone virtual, with loan statements, bank statements, credit card accounts, and even tuition bills delivered via email or on a secure server online.

Interested in going digital? Here’s what you need to know.

Invest in a good scanner.

The IRS was actually ahead of its time when it began accepting scanned receipts in 1997, in a rule called Revenue Proclamation 97-22. But the documents need to be legible, clear, and easy to access—which means that if your receipt is bunched, blurred, or otherwise illegible on your screen, it will likely be rejected, or … Read More