Thursday, August 29, 2013

Treasury and IRS Announce That All Legal Same-Sex Marriages Will Be Recognized For Federal Tax Purposes

IRS Issue Number:    IR-2013-72

The-Tax-Impact-of-Same-Sex-MarriageTreasury and IRS Announce That All Legal Same-Sex Marriages Will Be Recognized For Federal Tax Purposes; 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 Supreme Court decision invalidating a key provision of the 1996 Defense of Marriage Act.
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, see Tax Topic 308, Amended Returns, available on IRS.gov, 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.
Revenue Ruling 2013-17, along with updated Frequently Asked Questions for same-sex couples and updated FAQs for registered domestic partners and individuals in civil unions, are available today on IRS.gov. See also Publication 555, Community Property.
Treasury and the IRS will begin applying the terms of Revenue Ruling 2013-17 on Sept. 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.

Wednesday, August 28, 2013

Tax Reform for Students That Commute to College

College

Today’s college students and parents have a tough enough time trying to foot the bill for tuition and expenses; and as such many students are staying home, going to a local college and commuting.

Currently monies put into a 529 College Savings Plan can be used for room and board for those choosing to go away to school. Those students living at home and commuting to their college cannot use any monies in a 529 Plan to help with the commuting costs nor are they able to deduct the mileage using the IRS standard mileage rate like those for business do. There is a rate for business, medical and charity travel but nothing for education. This needs to change.


Washington needs to not only address this issue but take action immediately.


Please sign our petition.

Tuesday, August 20, 2013

Keep Opinions to Yourself Please

OK so you're a smart, unique and an all around interesting person who probably has strong views on many important topics. But... that doesn't mean you should talk about them with your customers, prospects or colleagues. You never know how your opinions will be received or perceived. In general, it's good business practice to avoid talking about religion, politics and moral beliefs. That doesn't mean you have to compromise yourself, but why alienate business relationships?

Thursday, August 1, 2013

PayPal, How To Use The Account In QuickBooks?

Paypal is a great way to send and receive payments, but many aren't quite sure how it should be set up in their QuickBooks file.  For all intents and purposes, it's a bank account and it should be treated as such.     

To set up your new PayPal account you go to your chart of accounts and click the Account button on the bottom of the window and click on New.  Name your account PayPal.



How exactly does QuickBooks and PayPal work together you ask?  You can manually enter all your PayPal transactions or you can export them from PayPal as an .iif file and import them into QuickBooks



You will also want to set PayPal up as a payment method both on the customer and vendor side.


 
When you're recording a payment from your customer you must also record the fees that PayPal charges. PayPal posts the money to your account net, meaning they deposit the funds after they take their fees. There are a couple ways you can post the payment; one way is to post the full amount of the payment and the record the fees as a negative amount when you are making the deposit. The other way is to record the net amount of the payment and "discount" the fee in order for the invoice to be recorded as paid in full.





If you use your PayPal account to pay your vendors you would process the payment in QuickBooks as if you were paying bills from your checking account. You can assign it a number as if it were a check, I like to put PP for PayPal in place of a number.



You will also need to link your checking account with your PayPal account in order to transfer funds from the PayPal account into your checking. PayPal also has a Debit MasterCard you can request that is linked to the funds that are in your PayPal account; makes purchasing easier and no more waiting for funds to be transferred into your checking account.



Don't forget to reconcile your PayPal account monthly just like you do your other checking and credit card accounts.

If you need additional information please contact us at info@laebusiness.com