Same-Sex Marriage Recognized for Federal Tax Filing Regardless of Where You Live

All Legal Same-Sex Marriages Will Be Recognized for Federal Tax Purposes
8/29/2013

Page Content

 Ruling Provides Certainty, Benefits and Protections Under Federal Tax Law for Same-Sex Married Couples

WASHINGTON — The U.S. Department of the Treasury and the Internal Revenue Service (IRS) today ruled that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes. The ruling applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage.

The ruling implements federal tax aspects of the June 26^th Supreme Court decision invalidating a key provision of the 1996 Defense of Marriage Act.

“Today’s ruling provides certainty and clear, coherent tax filing guidance for all legally married same-sex couples nationwide. It provides access to benefits, responsibilities and protections under federal tax law that all Americans deserve,” said Secretary Jacob J. Lew. “This ruling also assures legally married same-sex couples that they can move freely throughout the country knowing that their federal filing status will not change.”

Under the ruling, same sex couples will be treated as married for all federal tax purposes, including income and gift and estate taxes. The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA, and claiming the earned income tax credit or child tax credit.

Any same-sex marriage legally entered into in one of the 50 states, the District of Columbia, a U.S. territory, or a foreign country will be covered by the ruling. However, the ruling does not apply to registered domestic partnerships, civil unions, or similar formal relationships recognized under state law.

Legally-married same-sex couples generally must file their 2013 federal income tax return using either the “married filing jointly” or “married filing separately” filing status.

Individuals who were in same-sex marriages may, but are not required to, file original or amended returns choosing to be treated as married for federal tax purposes for one or more prior tax years still open under the statute of limitations.  

Generally, the statute of limitations for filing a refund claim is three years from the date the return was filed or two years from the date the tax was paid, whichever is later. As a result, refund claims can still be filed for tax years 2010, 2011, and 2012. Some taxpayers may have special circumstances (such as signing an agreement with the IRS to keep the statute of limitations open) that permit them to file refund claims for tax years 2009 and earlier.

Additionally, employees who purchased same-sex spouse health insurance coverage from their employers on an after-tax basis may treat the amounts paid for that coverage as pre-tax and excludable from income.

 

How to File a Claim for Refund

Taxpayers who wish to file a refund claim for income taxes should use Form 1040X, Amended U.S. Individual Income Tax Return.

Taxpayers who wish to file a refund claim for gift or estate taxes should file Form 843, Claim for Refund and Request for Abatement.

 

For information on filing an amended return, go to Tax Topic 308, Amended Returns at http://www.irs.gov/taxtopics/tc308.html or the Instructions to Forms 1040X and 843. Information on where to file your amended returns is available in the instructions to the form.    

 

Future Guidance

Treasury and the IRS intend to issue streamlined procedures for employers who wish to file refund claims for payroll taxes paid on previously-taxed health insurance and fringe benefits provided to same-sex spouses. Treasury and IRS also intend to issue further guidance on cafeteria plans and on how qualified retirement plans and other tax-favored arrangements should treat same-sex spouses for periods before the effective date of this Revenue Ruling.

 

Other agencies may provide guidance on other federal programs that they administer that are affected by the Code.

 

For Revenue Ruling 2013-17, click here.

 

For Frequently Asked Questions, click here.

 

For registered domestic partners who live in community property states, click here for Publication 555, Community Property.

 

Treasury and the IRS will begin applying the terms of Revenue Ruling 2013-17 on September 16, 2013, but taxpayers who wish to rely on the terms of the Revenue Ruling for earlier periods may choose to do so (as long as the statute of limitations for the earlier period has not expired).

DOMA Repael and Affordable Care Act

Book and Website We Love Breaking the Time Barrier - Book "Spectacularly simple, remarkably true for every small business owner who's determined to grow, Breaking the Time Barrier will work for you!" ~Michael E. Gerber (The E-Myth) How to unlock your true earning potential, FREE download of this book. FreshBooks.com - Website FreshBooks is simple and intuitive, so accounting isn't intimidating. Hello cloud, goodbye desk. With FreshBooks, your business is accessible everywhere, from your iPhone/iPad to your desktop, and your data is secure and backed up in the cloud.   "FreshBooks is one of the best accounting software for small business, Mac/Apple users that we have seen." ~MB Tax Pro

 

Supreme Court Keeps IRS Busy (DOMA repeal)    As if the IRS has not been busy enough lately trying to clean up after the scandals, now the Supreme Court's ruling on DOMA has them hopping.  With the Supreme Court striking down DOMA this  means that same sex couples will now be eligible for the thousands of federal benefits including filing their tax returns jointly.  IRS will now have to write guidance as to how this will be handled.  It's a messy situation with only 13 states recognizing same sex marriage.  For example, how will a couple legally married in California but living in Oregon be allowed to file?  Since Oregon does not currently allow same sex marriage would these taxpayers still have to file separately?  Right now this is how it looks.  I foresee more court cases in the future as this all plays out.  We will keep you posted as things become more clear over the next few months.       Affordable Care Act and Cover Oregon    Two upcoming things to be aware of. First, the Patient Protection and Affordable Care Act is starting January 1st, 2014 and will give people more insurance options. Second, you will be required to have insurance or pay an additional fine. Cover Oregon will be open for business in October 2013 to give everyone time to shop for coverage before the new health care benefits begin in January. CoverOregon.com

Fantastic Article On Gratitude and Reprogramming Your Brain For Success

SALES SOURCE | Geoffrey James

True Secret to Success (It's Not What You Think)

If you're not exercising this emotional muscle, you're probably setting yourself up for failure.

  

I'm utterly convinced that the key to lifelong success is the regular exercise of a single emotional muscle: gratitude.
People who approach life with a sense of gratitude are constantly aware of what's wonderful in their life. Because they enjoy the fruits of their successes, they seek out more success. And when things don't go as planned, people who are grateful can put failure into perspective.
By contrast, people who lack gratitude are never truly happy. If they succeed at a task, they don't enjoy it. For them, a string of successes is like trying to fill a bucket with a huge leak in the bottom. And failure invariably makes them bitter, angry, and discouraged.
Therefore, if you want to be successful, you need to feel more gratitude. Fortunately, gratitude, like most emotions, is like a muscle: The more you use it, the stronger and more resilient it becomes.
Practice Nightly
The best time to exercise gratitude is just before bed. Take out your tablet (electronic or otherwise) and record the events of the day that created positive emotions, either in you or in those around you.
Did you help somebody solve a problem? Write it down. Did you connect with a colleague or friend? Write it down. Did you make somebody smile? Write it down.
What you're doing is "programming your brain" to view your day more positively. You're throwing mental focus on what worked well, and shrugging off what didn't. As a result, you'll sleep better, and you'll wake up more refreshed.
Reprogramming Your Brain
More important, you're also programming your brain to notice even more reasons to feel gratitude. You'll quickly discover that even a "bad day" is full of moments that are worthy of gratitude. Success becomes sweeter; failure, less sour.
The more regularly you practice this exercise, the stronger its effects.
Over time, your "gratitude muscle" will become so strong that you'll attract more success into your life, not to mention greater numbers of successful (i.e., grateful) people. You'll also find yourself thanking people more often. That's good for you and for them, too.
This method works. If you don't believe me, try it for at least a week. You'll be amazed at what a huge difference it makes.
If you like this post, sign up for the free Sales Source newsletter.

Geoffrey James writes the Sales Source column on Inc.com, the world's most visited sales-oriented blog. His newly published book is Business to Business Selling: Power Words and Strategies From the World's Top Sales Experts. @Sales_Source

I Can't Pay, Now What?

 

What If I Can't Pay My Tax Bill?

 

 

 

So you owe taxes--you owe big time--and you can't possibly pay the balance. You aren't alone: The number of Americans who are behind on their taxes is estimated to be anywhere from 8 to 20 million.
So what do you do if you can't pay your tax bill? You have a mix of options, depending on your situation, and the IRS would certainly recommend that you reevaluate whether you can pay or not.
"The IRS will encourage an individual to borrow on their credit cards or take out a home equity line of credit. The IRS wants to be paid, and paid first," says Mary Lou Gervie, director of forensic accounting and dispute services at Watkins Meegan, a CPA firm based in Bethesda, Md.
But if you absolutely can't pay, there are two main approaches the IRS suggests. Since everyone's situation is different and there's no one-size-fits-all strategy, it's best to consult a tax preparer or professional for advice before proceeding. Here are your options:

The monthly installment. If you're behind on your taxes but feel you can pay eventually, this is probably your most appealing option.
The national media office at the Internal Revenue Service was unable to produce anyone for an interview, but the IRS did send information recommending that taxpayers who are behind either attach a letter with their tax return or fill out Form 9465--or better yet, simply go to www.irs.gov and fill out an online payment agreement application (www.irs.gov/Individuals/Online-Payment-Agreement-Application).
If you fill out the form online, you'll find out right away if you're eligible; going the snail-mail route generally takes 30 days or longer. If you owe $50,000 or less and can pay what you owe within six years, you can get a payment agreement, according to the IRS.

Why you might want to do this: Pretty obvious. You can pay the IRS monthly and no longer worry about what you owe the government.

What may be problematic: You still have plenty to worry about.
"Interest continues to accrue on the tax debt until paid in full," says Scott Estill, a former IRS senior trial attorney who is now in private practice in Littleton, Co., and specializes in helping taxpayers resolve issues with the IRS. He is also the author of "Tax This! An Insider's Guide to Standing up to the IRS" and several other tax publications.
Other than accruing interest, what's so bad about it continuing to add up? It may not end up being so dire, but it depends on the size of your debt, says Estill. "Depending upon the amount of the debt and the amount of the monthly payment, there may be situations in which negative amortization occurs, which is when the balance increases every month because the payment does not cover all of the interest on the debt," says Estill.
There are other negatives, he adds, explaining that the IRS can still file a federal tax lien against you and your property even with a payment plan in place, which can make it challenging to get a decent loan.
Estill also notes: "The IRS may require full financial disclosure of assets and liabilities, thus providing them with a road map to your assets if the installment agreement falls through by default." That is, due to missing payments.
Another concern, especially if you're self-employed and not seeing taxes removed from each paycheck: While you're paying your back taxes in a monthly installment plan, you still need to make payments on the current year so you don't fall behind. "It can be very stressful for people to come up with a fairly large amount every month," says Gervie. "It squeezes them."
In fact, if you make your monthly payment too high and fail to budget for taxes on the current year you need to pay, you might start a vicious cycle of owing the IRS indefinitely.

An offer in compromise. This is the second approach the IRS recommends if a taxpayer simply cannot pay what they owe.
In the words of the IRS, and the following is wordy but worth reading for anyone who might need to do this: "An offer in compromise allows you to settle your tax debt for less than the full amount you owe, if you meet strict requirements. This may be a legitimate option if you can't pay your full tax liability, or doing so creates a financial hardship. We consider your unique set of facts and circumstances: ability to pay; income; expenses; and asset equity. Generally, an offer will not be accepted if the IRS believes the liability can be paid in full as a lump sum or through a payment agreement. Before we can consider your offer, you must be current with all filing and payment requirements. Use the Offer in Compromise Pre-Qualifier to confirm your eligibility and prepare a preliminary proposal: http://irs.treasury.gov/oic_pre_qualifier/"

Why you might want to do this: Again, pretty obvious. You don't want to have this problem hanging over your head forever.

What may be problematic: You're spilling your financial guts to the IRS, says Estill. "Thus, the IRS will have an excellent road map to assets if the offer does not succeed," he says.
But there is also a statute of limitations the IRS has to collect a debt, and an offer in compromise extends that for an extra year, plus the time the offer was being reviewed, says Estill.
As Estill puts it, if you have a tax return for 2005 that was filed on April 15, 2006, your statute of limitations currently ends on April 15, 2016. But if your offer in compromise is rejected and it took the IRS six months to review the offer and reject it, it now has until Oct. 15, 2017, to collect the debt. So that's something to think about.
And yet another concern: "There is a five-year period of compliance required after the offer is accepted, and if the taxpayer has problems with paying a tax debt in the five years following the acceptance of the offer, it can cause the offer to be revoked and the taxpayer ends up back in the same position as pre-offer," says Estill.

Whatever you decide to do, file. It can be scary dealing with the IRS because, well, it's all-powerful. Nevertheless, file--even if you can't pay.
"It doesn't get better by hiding your head in the sand just because you don't have the money," says Benson Goldstein, senior technical manager of taxation for the American Institute of CPAs, which is headquartered in New York.

Goldstein adds that if for no other reason, you should file to get that decade-long statute of limitations started.
Not that you want to drag out the experience of owing the IRS for 10 years, but if you don't file, it will take longer to resolve your tax issues. What you likely won't do is go to jail or lose your house from owing the IRS, says Estill. That is, as long as you're on the up and up when working with the agency.
"There has to be some intention to deceive or defraud the IRS before criminal elements come into play," says Estill.



By Geoff Williams | U.S.News & World Report LP – Thu, Apr 4, 2013 3:24 PM EDT

Relief For Late-Paying Penalty For A Lot of Filers

Relief Available To Many Extension Requesters Claiming Tax Benefits

 

WASHINGTON —The Internal Revenue Service today provided late-payment penalty relief to individuals and businesses requesting a tax-filing extension because they are attaching to their returns any of the forms that couldn’t be filed until after January.

The relief applies to the late-payment penalty, normally 0.5 percent per month, charged on tax payments made after the regular filing deadline. This relief applies to any of the forms delayed until February or March, primarily due to the January enactment of the American Taxpayer Relief Act.

Taxpayers using forms claiming such tax benefits as depreciation deductions and a variety of business credits qualify for this relief. A complete list of eligible forms can be found in Notice 2013-24, posted today on IRS.gov.

Individuals and businesses qualify for this relief if they properly request an extension to file their 2012 returns. Eligible taxpayers need not make any special notation on their extension request, but as usual, they must properly estimate their expected tax liability and pay the estimated amount by the original due date of the return.

The return must be filed and payment for any additional amount due must be made by the extended dud date. Interest still applies to any tax payment made after the original deadline.
  
A complete list of qualifying forms here: http://www.irs.gov/pub/irs-drop/n-13-24.pdf

Show Me The Money!

Where's My Refund?

IRS:

If you already filed your federal tax return and are due a refund, you have several options to check on your refund. Here are some things the IRS wants you to know about checking the status of your refund. "Where’s My Refund?" is an interactive tool on http://www.irs.gov and is the fastest, easiest way to get information about your federal income tax refund. Whether you split your refund among several accounts, opted for direct deposit into one account, used part of your refund to buy U.S. Savings Bonds or asked the IRS to mail you a check, Where’s My Refund? gives you online access to your refund information, 24 hours a day, 7 days a week. It’s quick, easy and secure. If you e-file, you can get refund information 72 hours after the IRS acknowledges receipt of your return. If you file a paper return, refund information will generally be available three to four weeks after mailing your return. When checking the status of your refund, have your federal tax return handy. To get your personalized refund information you must enter your Social Security Number or Individual Taxpayer Identification Number, your filing status which will be Single, Married Filing Joint Return, Married, Filing Separate Return, Head of Household, or Qualifying Widow(er), AND the exact whole dollar refund amount shown on your tax return. IRS2Go is is the IRS’ first smartphone application that lets taxpayers check on the status of their tax refund. Apple users can download the free IRS2Go application by visiting the Apple App Store. Android users can visit the Android Marketplace to download the free IRS2Go app.

 

OREGON:

Want to check on the status of your 2011 Oregon personal income tax refund? With just your name, your Social Security number, and last year's Oregon Taxable Income, you can look up your status online! It's safe, it's secure, and it's really easy, just go to "Where's My Refund?" and follow the steps online.

 

CALIFORNIA:

You will need the following to check the status of your 2011 California personal income tax refund:
Your social security number, your mailing address, and the refund amount shown on your tax return. For more information and to check on your refund, see "Where's My Refund California?"

NEW YORK:

Generally, you'll get your refund in six to eight weeks from the date we receive your return. You'll get it faster if you e-file your return and have your refund deposited directly into your bank account. If we identify an issue with a tax return, our review may take longer than six to eight weeks.

To check the status of your refund, see Income Tax Refund Status.

What Is The Arts Tax for Portland?

 

 

Did You Recieve This in the Mail?

 

 On November 6, 2012, Portland voters passed the Arts Education and Access Income Tax (Arts Tax). This new income tax will fund Portland school teachers and art focused non-profit organizations in Portland.

Each Portland resident, age 18 and older, must file. Your tax is $35 unless:

• You did not have any income; OR
• Your household is at or below the federal poverty level

Call 503-865-4ART (4278) to speak to a customer service representative Monday thru Friday, from 8 a.m. to 5 p.m., or email artstaxhelp@portlandoregon.gov.

 

 

 

How To Pay The Tax

 

https://www.portlandoregon.gov/revenue/artstax/index.cfm?action=PaymentInfo

 

MB Tax Pro, does NOT file this on your behalf, you are required to file.

 

Where Does the Money Go?

 

Net revenues from the Arts Education and Access Fund will be disbursed by the Revenue Bureau to six Portland area school districts and Regional Arts & Culture Council (RACC). The Citizen Oversight Committee is charged with reviewing the expenditures, progress and outcomes of the Arts Education & Access Fund and reporting their findings annually to City Council.

 Arts Education: Portland School Districts

1. Funds distributed to school districts will be used to hire certified arts or music education teachers for elementary school students for Kindergarten through 5th grade (K-5).
2. Distribution is based on a ratio of one teacher for every 500 K-5 students at schools that serve Portland K-5 students. Schools and Charter schools with less than 500 Portland K-5 students will get funds on a pro rata basis based on the number of students attending that school.
3. Students attending schools that receive no distribution of funds will not be counted.

Funds will not be distributed to elementary schools within the school districts:

1. That have no Portland K-5 students.
2. That have Portland K-5 students enrolled, but whose catchment does not overlap with the City of Portland’s geographical boundaries.

Districts receiving funding:

• Centennial School District
• David Douglas School District
• Parkrose School District
• Portland Public Schools
• Reynolds School District
• Riverdale School District

Arts Access: Regional Arts & Culture Council

Any funds remaining after distribution to the School Districts shall be distributed to RACC. The City’s contract with RACC ensures the funds are spent as follows:

Grants to support non-profit Portland arts organizations

1. Up to 95% of the remaining funds will be distributed to RACC for grants to support non-profit Portland arts organizations.
2. RACC will decide which arts organizations will get funds based on their contract with the City.
3. If RACC distributes less than 95% of the funds to non-profit Portland arts organizations, the remaining funds will go to non-profit organizations and schools that will give access to arts experiences to K-12 students and for grants and programs that will make arts and culture experiences available to Portland residents.