The Boston marriage is a distant memory that you remember fondly as a whirlwind of sightseeing, seafood, and romance. But otherwise you never think of it – you’re single now.
You may be living as a single (or as a cope with someone new) but for tax purposes you are still married to the old love of your life unless you’ve somehow managed to get legally divorced.
How Do You File?
Starting with your 2013 tax return, you will have to file using the rules for married taxpayers. Unless there are kids in your home, you’ll file married filing separately. If you’re providing a home for your children or certain other relatives, you may qualify to file as single or head of household.
Until you get legally divorced (which may be more difficult than getting legally married), you’ll have to determine your filing status using the rules for married taxpayers.
]]>So, how many couples give any thought to taxes when getting married? Not many! Nothing wrong with that—but it’s not a bad idea to learn a little about what marriage might mean for your taxes. With this in mind, this is the first in a series of blogs exploring how the tax effects of getting or being married.
]]>For same-sex married couples, the out of pocket cost for benefits has been as much as 50% higher for the spouse’s coverage because of taxes. The extra cost came into play because the benefits were taxable to the employee.
The IRS now recognizes same-sex for all federal income tax purposes. And the recognition is retroactive for earlier years – if employees were married in those years. The IRS will refund overpayments for up to three years.
It seems simple, but there’s a bit of work involved. The first step for employers is to identify employees who paid tax on a partner’s benefits – but who was married to the partner at the time!
For fringe benefits that were taxed (but that, thanks to Windsor, are now tax-free), there are four parts to getting taxes refunded:
Add them all up and we’re in for a challenging tax season. Here’s what you can expect.
LATE START
The first day for efiling your 2012 return is January 22, 2013. How does this compare to other years?
Before 2012, efiling for individual returns usually started the second Friday in January. In 2012, the IRS delayed the efiling start until January 17 (the third Tuesday in January) and for 2013 the start is yet another week later.
Returns filed the first week of efiling often take a few extra days of processing, so the earliest refunds probably won’t show up until nearly mid-February. While you could get a jump start on filing by mailing your return in before January 22, refunds on mailed-in returns usually take four weeks to process, rather than the two to three weeks for efiled returns.
REFUNDS MAY BE SLOWER
Fraud and identity theft are a growing problem for the IRS. New screening and matching processes at the IRS will slow down some refunds. According to an IRS statement, 90 percent of refunds were issued in 21 days or less last year and they expect the same results this year.
What the IRS didn’t say is that most direct deposit refunds were made in fewer than 14 days in the past and efiled returns with refund checks mailed were received by taxpayers in about three weeks. So we expect slower refunds.
How slow? Hard to tell. In previous years the IRS issued a chart that indicated the date to expect a refund based on the date the return was accepted at the IRS. That chart has been discontinued.
And adding to the uncertainty, the popular Where’s My Refund? feature at irs.gov won’t give an expected refund date until several days after the IRS receives the tax return.
SOME FORMS MAY BE DELAYED
Blame the fiscal cliff. Several tax laws expired on December 31, 2011. They haven’t been renewed. But they may still be resurrected if Congress reinstates them (or some modification of them) retroactively.
Oddly enough, this isn’t news – it seems to happen nearly every year – especially with regard to the alternative minimum tax (AMT). The IRS is left in a no-man’s-land to decide how to write forms, instructions, and software programming.
And if they guessed wrong, they have to redo their work.
So, the date you can file your tax return depends on how accurately the IRS guessed about what the 2012 tax laws will be by the time retroactive changes are passed. If you need a form that’s not available because of tax law changes, it may be March before you can file.
One thing is for certain – the 2013 tax return season will be anything but boring!
]]>“Does my dog count?”
The short answer is “no.” The technical answer is “no.” (That’s because you can’t legally claim your dog as a dependent. Ever.)
But, as with most tax questions, the real answer is, “it depends.” Many of us lavish our pets with high-quality food, too many toys, regular grooming, and lots of treats. Not to mention the cost of routine veterinary care and the occasional visit to the emergency vet. It all adds up to lots of (nondeductible) dollars.
Quick – what are the situations that turn those nondeductible dollars into tax deductions?
1 – Service and Assistance Dogs
Expenses for service and assistance dogs are deductible medical expenses. These dogs are performing tasks that mitigates the effect of a disability. Just because you feel calmer when you pet Sir Barks A Lot doesn’t put him into the service dog category. Guide dogs for the blind are the best-known service dogs. Other dogs (and some other animals) are trained for a range of assistance skills, mitigating the effects of disabilities, including blindness, mobility impairment, autism and post-traumatic stress disorder.
The costs of training, purchasing, and maintaining service animals are part of medical expenses each year. Maintenance includes food, grooming, health care, and other supplies.
2 – Curious? Come back for more!
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