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
… Read More

Avoiding an Audit: A Taxpayer’s Guide

One of the biggest fears a taxpayer may have is the dreaded phone call from the IRS or the letter in the mail labeled AUDIT.* Although your chances of being audited are slim (only 1% of U.S. taxpayers are selected), there’s good reason to want to avoid it—if the IRS finds out you’ve misreported income or expenses, you could be faced with back taxes, hefty fines, and possible jail time.

The selection process isn’t random; the IRS selects taxpayers for auditing if their returns raise questions—things like large deductions, extravagant purchases on a meager income, and cash-only business transactions are a few of the red flags that might put you on the top of the list.

Luckily, there are a few things you can do to keep your taxes in order and stay on the good side of the IRS:

Hire a Tax Professional

Using the services of a licensed accountant … Read More

Breaking: 2013 IRS Furlough

The ink on 2012 tax returns was barely dry when the National Treasury Employees Union announced an IRS-wide furlough implementation for the 2013 calendar year. On five separate days in 2013, the IRS will be closed: May 24, June 14, July 5, July 22, and August 30. This means no answered phone calls, no conversations with IRS members about tax problems—in short, five very anxious days for anyone who needs tax help or advice.

Citing sequestration as the cause of this “disappointing development,” NTEU president Colleen M. Kelley voiced concerns about taxpayer impact, noting that while Tax Day may be over, many small businesses, taxpayers, and government entities still need IRS assistance to manage quarterly payments and fiscal-year business. But on the 2013 furlough dates, their calls will go unanswered. “I believe this is an unprecedented event that leaves taxpayers out in the cold,” Kelley said.

And taxpayer impact is only … Read More