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

Why You Need to Send Your Spouse a Love Letter—About Money (@MONEY)

Financial writer Sarah Max answers a very important question asked by a reader: What happens if the spouse who handles all the finances dies first? She offers some good solutions:

Full article at MONEY Magazine

"Q: I have accounts with various institutions and have been doing my own investing for more than 30 years. I recently married again but my wife does not get involved with my investments. What instructions should I give her about how to handle these accounts if I die first? — Anonymous"



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

Watch that free money for IRA rollovers (@RetireRevised @Reuters @bethpinsker)

Mark Miller does a good job explaining the potential benefits of moving your Individual Retirement Account (IRA) to a different institution, as well as rolling over your 401(k) into an IRA. But perhaps more importantly, he explains why (and when) this may not be a good idea, and points out some potential pitfalls to look out for.

Full Article at Reuters

"Back in the day, you could walk into a bank to open a new account and walk out with a free toaster.

Today, you can get anywhere from $50 to $2,500 for rolling over a 401(k) into an Individual Retirement Account, or just by moving an IRA from another financial institution. 
But since banks are not in the habit of giving away money, you need to ask: What is the catch?"

To learn more about us, go to our website http://www.lgbt.tax/about

10 Money Mistakes That Can Ruin a Marriage (@YahooFinance)

Renee Morad shares 10 mistakes that couples often make regarding how they use and communicate about money in their relationship.


Full article at Yahoo! Finance


"As anyone who’s been there knows, there’s no such thing as a friction-free marriage. But arguing can be ominous when the topic is money.

"Couples who reported disagreeing about finances once a week were 30 percent more likely to get divorced than couples who reported disagreeing about them once a month, according to a Utah State University study."

Check out our website for more information about us http://www.lgbt.tax/

Gift Tax -- Things to Keep in Mind

Everyone loves giving gifts, but depending on the value of the gift, you may have to make one to Uncle Sam as well.

Federal law requires every person who makes a gift of cash or property to another person (except their spouse) to file a gift tax return and pay taxes if the value of the gift is more than the gift tax annual exclusion. Gift taxes are paid by the donor of the gift, not the recipient.

In 2015, the annual gift tax exclusion amount is $14,000, although it increases every year. Gift taxes are calculated on the portion of the gift that exceeds the annual exclusion; in 2015, the gift tax rate is 40%. Gifts are also cumulative, meaning it is the total amount of all gifts made to a single person each year, and not the individual value of each gift.

So if in one calendar year you make one gift of $20,000, or four gifts of $5,000 each, to the same person, you must file a gift tax return. The tax will be calculated on $6,000, the difference between the $20,000 gift and the $14,000 annual exclusion.

There are certain exceptions to the gift tax requirement. No gift tax return is required, and no taxes will be incurred, if the gift was made to benefit any of the following:

• Spouse. The marital exclusion only applies to couples who are legally married; couples in domestic partnerships do not benefit from the exclusion.  With the Repeal of DOMA, this is one more reason to consider marriage.
• Education or medical institutions. Payment for someone’s education or medical expenses are not subject to gift tax, provided the payments are made directly to the educational institution or medical provider. So if you are paying for your son’s or granddaughter’s college education, make sure the payments are made directly to the college, not to your son.
• Charitable donations. The recipient must be a recognized by the IRS as a qualified charitable organization.
• Political contributions. The recipient must be a recognized political candidate or organization (keeping in mind state and federal election finance rules).

If you make a gift that triggers the gift tax, you have two options. The first is to file a gift tax return in the year the gift is made and pay taxes.

The more popular option is to apply the gift toward your lifetime estate tax exemption, which is currently $5.43 million (remember, the amount applied toward the exemption is the amount that exceeds the $14,000, or the then applicable, annual exclusion). This then reduces your available estate tax exemption, which is the amount of money each person can pass onto heirs or beneficiaries, tax-free, at his or her death. When you die, if the total value of your estate is less than the estate tax exemption amount, as adjusted, (which it is for the vast majority of people), the end result is a tax-free gift to beneficiaries.

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

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/

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.