Fate of Domestic Partner Benefits in Question After Marriage Ruling (@tarasbernard @Your_Money @nytimes)

The ruling by the Supreme Court last week has been cause for joy and celebration for many, but for some couples who have been domestic partners for years, and who do not want to get married, it has given them cause for concern as well:

Full article at The New York Times

"Though it is unclear what most employers will decide, some companies are likely to deliver what feels like an ultimatum, at least to some: Marry within a certain time frame, or lose your partner’s health care coverage. Some large employers — including Verizon, Delta Air Lines, IBM and Corning — already have."

If you filed taxes in CA, NV, OR or Washington states and are (or were after 2010) Registered Domestic Partners, try our calculator to see if you may be eligible for an IRS refund http://www.lgbt.tax/Calculator

Tax Day extra difficult for many same-sex married couples (@stephenatap @AP)

For same-sex couples living in states that do not recognize same-sex marriage, filing taxes can get very complicated:

Full Article from the AP

"It gets complicated because most state income tax returns use information from a taxpayer's federal return.
Straight couples simply copy numbers from one form to another. But that doesn't work for same-sex couples reporting combined incomes, deductions and exemptions on their federal tax returns. These couples must untangle their finances on their state returns, where they are still considered single."



If you filed taxes in CA, NV, OR or Washington states and are (or were after 2010) Registered Domestic Partners, try our calculator to see if you may be eligible for an IRS refund http://www.lgbt.tax/Calculator

Americans Failing on Basic Income Tax Knowledge (@NerdWallet)

How well do you basic income tax codes? According to NerdWallet, chances are you don't know much. Take the survey at NerdWallet and see how you compare with others!

Full article at NerdWallet

"Most American adults get an “F” in understanding income tax basics, according to a NerdWallet survey of 1,015 people across the U.S. in early February. Respondents scored on average 51% in a 10-question quiz on tax basics related to such personal finance issues as retirement, college savings and health care."

To have us call you about finance, estate planning or tax issues, fill out the form at http://www.lgbt.tax/Start

6 Financial Issues All Same-Sex Couples Should Discuss (@emstarbuck @nerdwallet)

This article highlights important financial issues for couples to consider. Talking about money is sometimes difficult, but very important.  Emily did a great job and gets our thanks for including us in her article.


http://ow.ly/IJS8C


"All couples in long-term relationships must learn how to tackle financial decisions together. But gay and lesbian couples face additional challenges thanks to confusing and ever-changing laws."

For more information, contact us at http://www.lgbt.tax/contactus

Buyer Beware [10 Subliminal Retail Tricks You’re Probably Falling For]

Susie Poppick @susiepoppick of Money shows us how we are manipulated to buy.  Buyer beware.


http://ow.ly/GlXoy




"Consumer experience these days is not simply designed; it’s engineered. Research determines the ads you see, the scents and sounds you encounter in stores, even the way a salesperson might casually touch your arm. It’s not all high-tech brain science, but here are some of the tricks companies use to entice you to spend more."


Check out of website for more information http://www.lgbt.tax/

This is why people carry credit card balances [FromMarket Watch]

Interesting article from Simon Constable on why we carry credit card debt.


http://ow.ly/GiXUV


"Why do people so often carry credit-card balances costing 10% to 20% a year, while at the same time keeping money in savings accounts that pay less than half of one percent?"

To have us call you about finance, estate planning or tax issues, fill out the form at http://www.lgbt.tax/Start

Banking as a Couple: One Checking Account or Two?

It is legal for same-sex couples to open and maintain joint checking accounts in every state in the country, even where gay marriages or even civil unions are not recognized. College roommates, a parent and a child or two Army buddies could all open joint checking accounts – without anyone asking if they’re gay or straight.

But is banking as a couple always a good idea? Consider the benefits and drawbacks before you decide.

Pros

• When two people share a bank account, they pool resources, with each then having access to more money than they would have as individuals.
• Simplification: The entire aggregate of the couple’s cumulative expenses is laid out in one single place on one single balance sheet.
• Transparency: Each can clearly see the expenditures of the other. This can be especially beneficial if one person is more financially responsible. The open nature of a joint account can make the more prudent party less likely to play cop, and can subtly goad the spendthrift into fiscal responsibility.
• It can make couples feel more like a couple – especially in states where same-sex marriage is not recognized. Perhaps more importantly, a joint checking account can serve as a “step” on the way to marriage (or basic cohabitation) to test the waters regarding financial competence, trust and compatibility.

Cons

• Loss of privacy: Everything one party spends – and, if you use a shared debit card, everywhere they spend it – is visible to the other.
• Neither party any longer has his/her “own money”, which can be difficult for independent people to accept.
• If one party earns more than the other, resentment can be a factor for both parties.
• Neither partner can be certain of current bank balance as both partners write checks from the same account.
   
• The biggest risk by far, however, comes down to trust, financial competence and potential for abuse. If one party sees a text message they don’t like on the other’s cell phone, they can take every dollar out of the joint account on their way out of the relationship, and the other party has essentially no legal recourse. If one allows tax arrears to fester, the government can seize funds in the account, regardless of whether the partner timely paid his or her taxes. A poorly maintained or frequently overdrawn checking account can degrade borrowing power or limit options for people whose credit is in poor shape, whether they were the ones who were irresponsible or not.

Sharing expenses is an intimate and personal choice for all couples – but it doesn’t have to be absolute. Consider maintaining separate checking accounts, but also open a combined checking account exclusively for shared bills (or emergencies) as a way to ease into this important and consequential decision.

For more information, contact us at http://www.lgbt.tax/contactus

The RDP Advantage™

There is a little known rule that is available to help Registered Domestic Partners (RDP) in community property states.  This rule, when applied to a couple in the correct circumstance, can result in a significant federal income tax refund.  We call the application of this rule, the RDP Advantage™.

With the RDP Advantage™, RDP couples can report their taxable income in the most advantageous way possible.  This may involve reporting wages on one partner’s tax return, both returns or splitting it between the two partners.  The benefits can be even greater if the couple has children.

Since tax nuances at their best are dull, we will demonstrate how the RDP Advantage™ can be applied by presenting an actual case study from our office:   Spoiler Alert, the couple saved an extra $60,000 in income taxes and got that money back as a tax free refund. 

M and D are registered domestic partners who adopted two children in 2010.  M works as an employee and earns $250,000 annually.  D is a stay at home parent.  When the couple came to our company (AdoptFund, Inc., our adoption credit division) they had been told they were not entitled to a refund from the IRS, not for their adoption, or for any other reason.   A friend of theirs, our client, referred M&D to our office to see if we could help them get money back from the IRS.  At first, it appeared that M&D were not eligible for a refund, but when we looked at applying the RDP Advantage™ to their tax situation, everything changed. 

1. Their tax status changed, resulting in an immediate refund of $5,000;
2. The applied tax rates resulted in an additional $30,000 refund (over two years);
3. The application of the RDP Advantage™ reduced each taxpayer’s income below the adoption credit threshold resulting in an additional $25,000 in refunds.
4. Net refund (before accrued interest) more than $60,000.

These results were better than most because of the income differences between the partners and the adoptions in the affected years.  If there had been no adoption credit, this couple would have still received about $30,000 in tax refunds.    Imagine what you can do with this tax free refund!

As mentioned above, the RDP Advantage™ is only available in community property states that recognize Registered Domestic Partnerships.  Currently, the four states are California, Nevada, Oregon and Washington.  If you live in those states and are in an RDP, you may be eligible for this special tax treatment.  Feel free to use our Refund Calculator to see if you are eligible for a refund or call or email our office for a free consultation.