Showing posts with label Same-Sex Marriage. Show all posts
Showing posts with label Same-Sex Marriage. Show all posts
Friday, January 28, 2011
Tax Clinic Promotion With One Iowa
I am proud to announce that I will be holding a free tax clinic about the tax implications of same-sex marriage on Saturday, March 12, at the One Iowa offices in downtown Des Moines. Aside from the clinic, I am also running a promotion now through tax season - if you mention "One Iowa" when hiring me to prepare your taxes, I will donate 15% of my fee to the One Iowa Education Fund. For more information, please e-mail me at dinesentax@gmail.com.
Saturday, January 15, 2011
Tax Headaches for Same-Sex Couples in California, Nevada and Washington
The New York Times has a good article about the tax headaches faced by same-sex married couples in California, Nevada and Washington, where special "community property rules" apply. An IRS ruling in 2010 allows same-sex married couples in those states to calculate their federal taxes in the same was as opposite-sex couples. Most people considered the ruling a step forward for same-sex couples, but as the article points out, it is also a source of headaches and confusion.
I wrote two articles about the ruling in 2010. Those articles can be found here and here.
I wrote two articles about the ruling in 2010. Those articles can be found here and here.
Friday, January 14, 2011
Oops! Yale Payroll Error Costs Gay Employees
Yale University says it made a payroll error that resulted in under-withholding for 61 employees with same-sex partners. Yale failed to withhold federal taxes on the value of domestic partner health insurance during 2010.
Same-sex marriage is legal in Connecticut, where Yale is located, but the federal government does not recognize same-sex marriage. The issue here is taxability of health insurance provided to a same-sex spouse. Connecticut does not tax the value of such health insurance, but the federal government does. A programming error in Yale's payroll system treated the health insurance as not taxable for both state and federal purposes, instead of just for state purposes, so federal taxes were not withheld on the value of the insurance.
The affected employees will see smaller paychecks in 2011, because they'll not only have "regular" withholding for 2011, but they'll also have the 2010 under-withholding withheld from their paychecks in 2011.
Read all about it in this New York Times blog.
Same-sex marriage is legal in Connecticut, where Yale is located, but the federal government does not recognize same-sex marriage. The issue here is taxability of health insurance provided to a same-sex spouse. Connecticut does not tax the value of such health insurance, but the federal government does. A programming error in Yale's payroll system treated the health insurance as not taxable for both state and federal purposes, instead of just for state purposes, so federal taxes were not withheld on the value of the insurance.
The affected employees will see smaller paychecks in 2011, because they'll not only have "regular" withholding for 2011, but they'll also have the 2010 under-withholding withheld from their paychecks in 2011.
Read all about it in this New York Times blog.
Tuesday, November 16, 2010
Barclays to Reimburse Same-Sex Couples for Health Insurance Costs
British-based Barclays has announced that it will "gross up" pay of U.S. employees to help off-set the extra taxes paid by employees whose health insurance covers a same-sex partner. Under federal law, the value of insurance coverage for people other than spouses or dependents is included in income. (Remember, federal law does not recognize same-sex marriage, so a same-sex spouse is not considered a "spouse" for federal purposes.)
According to the New York Times, Cisco, Google, The Kimpton Hotels, and The Gates Foundation also provide similar reimbursement programs for employees in same-sex relationships.
Read more at the Times and at Bloomberg.
According to the New York Times, Cisco, Google, The Kimpton Hotels, and The Gates Foundation also provide similar reimbursement programs for employees in same-sex relationships.
Read more at the Times and at Bloomberg.
Friday, November 12, 2010
Two New Lawsuits Challenge DOMA Regarding Tax Issues
Two lawsuits have been filed this week which challenge the Federal Defense of Marriage Act of 1996 (DOMA). DOMA defines marriage, for federal government purposes, as being ONLY between a man and a woman. As we have blogged about before at the Dinesen Tax Times, this creates unique headaches for same-sex couples who are legally married under state law, such as here in Iowa. The federal government does not recognize same-sex marriages, period.
One lawsuit filed in a Manhattan federal court by a woman named Edith Schlain Windsor involves the estate tax. In this case, Edith and her same-sex spouse, Thea Spyer, were married in Canada but lived in New York. The state of New York recognized their marriage, but the federal government did not. When Thea died in 2009, more than $350,000 in estate taxes were assessed, even though Edith was the beneficiary. If they had been an opposite-sex couple, the "unlimited marital deduction" would likely have applied, and no estate tax would have been assessed.
The other lawsuit was filed in federal court in Connecticut and involves federal employees who are legally married under state law to a same-sex spouse. According to the Wall Street Journal, "The lawsuit alleges the couples were denied certain benefits because their marriages aren't recognized under federal law, including work leave to care for a spouse and retirement or survivor benefits."
One lawsuit filed in a Manhattan federal court by a woman named Edith Schlain Windsor involves the estate tax. In this case, Edith and her same-sex spouse, Thea Spyer, were married in Canada but lived in New York. The state of New York recognized their marriage, but the federal government did not. When Thea died in 2009, more than $350,000 in estate taxes were assessed, even though Edith was the beneficiary. If they had been an opposite-sex couple, the "unlimited marital deduction" would likely have applied, and no estate tax would have been assessed.
The other lawsuit was filed in federal court in Connecticut and involves federal employees who are legally married under state law to a same-sex spouse. According to the Wall Street Journal, "The lawsuit alleges the couples were denied certain benefits because their marriages aren't recognized under federal law, including work leave to care for a spouse and retirement or survivor benefits."
Saturday, July 17, 2010
Tax News Roundup 7/17/2010
Here's a roundup of some of the tax news from this week....
SNIPES SENTENCED
Actor Wesley Snipes has lost his appeal of his 2008 conviction for willfully failing to file tax returns. Snipes had said he failed to receive a fair trial and that the three-year prison sentence he received was not fair, but an appeals court in Florida this week disagreed. Snipes was convicted of failing to file tax returns and pay income tax on more than $37 million of income between 1999-2004. You can read more about his case in a variety of locations, including here and here.
Jason’s comments: Snipes aligned himself with dubious tax advisors who led him into frivolous tax positions. What is a frivolous tax position? Here’s a good example, from the Orlando Sentinel:
“(Snipes) claimed that as a "fiduciary of God who is a 'non-taxpayer,' he was a foreign diplomat and not obligated to pay U.S. taxes….”
Those kinds of arguments never work. Bottom line? File your tax returns!
RETURNED MAIL COSTS THE IRS $57.9 MILLIONThe Treasury Inspector General for Tax Administration (TIGTA) this week released a report showing that, of the 200 million pieces of mail the IRS sends out to taxpayers, more than 19 million of those pieces of mail were returned as undeliverable in 2009. The report says the returned mail costs the IRS $57.9 million, and can cause harm to taxpayers because penalties and interest can rack up when notices are not received.
The report recommends that the IRS provide more ways for taxpayers to update addresses. Currently, the IRS accepts changes over the phone or the internet only in limited circumstances. For most people, your address gets updated at the IRS when you file a tax return with a new address on it, or when you submit Form 8822. Form 8822 should be submitted if you move after you have filed your tax return for the year.
Brave souls can read the entire TIGTA report here.
Jason’s comment: If you move and are concerned about the IRS not having your current address, contact your tax advisor. You may want to file Form 8822.
ESTATE TAX RUMBLINGS
Another estate tax proposal was made this week, this time a bipartisan proposal from Democrat Senator Blanche Lincoln of Arkansas and Republican Senator John Kyl of Arizona. Their proposal calls for an exemption of $5 million (phased in over 10 years and indexed for inflation), and a flat rate of 35%. It appears their proposal would allow taxpayers to either use this year’s estate tax rate (0%) but not get a basis step up, or use the 35% rate with a basis step up.
There have been a number of estate tax proposals out there. Iowa Senator Tom Harkin recently co-sponsored legislation that would provide an exemption amount of $3.5 million. Estates valued between $3.5 million and $10 million would be taxed at 45%, estates between $10 million and 50 million would be taxed at 50%, and estates worth more than $50 million would be taxed at 55%. The proposal also calls for an additional “billionaire’s surtax” of 10%.
In 2009, the top rate was 45% with an exemption amount of $3.5 million. If Congress does nothing, the estate tax will return in 2011 with a flat rate of 55% and an exemption amount of $1 million.
Jason’s comments: It will be interesting to see what happens. I wonder if the death this week of billionaire New York Yankees owner George Steinbrenner will spur action on the estate tax. Speaking of Steinbrenner, here’s an article that talks about the estate tax implications of Steinbrenner’s death.
YOURS TRULY FEATURED IN ONE IOWA ARTICLEI recently had an article featured at One Iowa, talking about gift tax issues facing same-sex couples. You can read the article here.
SNIPES SENTENCED
Actor Wesley Snipes has lost his appeal of his 2008 conviction for willfully failing to file tax returns. Snipes had said he failed to receive a fair trial and that the three-year prison sentence he received was not fair, but an appeals court in Florida this week disagreed. Snipes was convicted of failing to file tax returns and pay income tax on more than $37 million of income between 1999-2004. You can read more about his case in a variety of locations, including here and here.
Jason’s comments: Snipes aligned himself with dubious tax advisors who led him into frivolous tax positions. What is a frivolous tax position? Here’s a good example, from the Orlando Sentinel:
“(Snipes) claimed that as a "fiduciary of God who is a 'non-taxpayer,' he was a foreign diplomat and not obligated to pay U.S. taxes….”
Those kinds of arguments never work. Bottom line? File your tax returns!
RETURNED MAIL COSTS THE IRS $57.9 MILLIONThe Treasury Inspector General for Tax Administration (TIGTA) this week released a report showing that, of the 200 million pieces of mail the IRS sends out to taxpayers, more than 19 million of those pieces of mail were returned as undeliverable in 2009. The report says the returned mail costs the IRS $57.9 million, and can cause harm to taxpayers because penalties and interest can rack up when notices are not received.
The report recommends that the IRS provide more ways for taxpayers to update addresses. Currently, the IRS accepts changes over the phone or the internet only in limited circumstances. For most people, your address gets updated at the IRS when you file a tax return with a new address on it, or when you submit Form 8822. Form 8822 should be submitted if you move after you have filed your tax return for the year.
Brave souls can read the entire TIGTA report here.
Jason’s comment: If you move and are concerned about the IRS not having your current address, contact your tax advisor. You may want to file Form 8822.
ESTATE TAX RUMBLINGS
Another estate tax proposal was made this week, this time a bipartisan proposal from Democrat Senator Blanche Lincoln of Arkansas and Republican Senator John Kyl of Arizona. Their proposal calls for an exemption of $5 million (phased in over 10 years and indexed for inflation), and a flat rate of 35%. It appears their proposal would allow taxpayers to either use this year’s estate tax rate (0%) but not get a basis step up, or use the 35% rate with a basis step up.
There have been a number of estate tax proposals out there. Iowa Senator Tom Harkin recently co-sponsored legislation that would provide an exemption amount of $3.5 million. Estates valued between $3.5 million and $10 million would be taxed at 45%, estates between $10 million and 50 million would be taxed at 50%, and estates worth more than $50 million would be taxed at 55%. The proposal also calls for an additional “billionaire’s surtax” of 10%.
In 2009, the top rate was 45% with an exemption amount of $3.5 million. If Congress does nothing, the estate tax will return in 2011 with a flat rate of 55% and an exemption amount of $1 million.
Jason’s comments: It will be interesting to see what happens. I wonder if the death this week of billionaire New York Yankees owner George Steinbrenner will spur action on the estate tax. Speaking of Steinbrenner, here’s an article that talks about the estate tax implications of Steinbrenner’s death.
YOURS TRULY FEATURED IN ONE IOWA ARTICLEI recently had an article featured at One Iowa, talking about gift tax issues facing same-sex couples. You can read the article here.
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