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What Same Sex Couples Should Know During Tax Time

At the time when the founding fathers were signing the Declaration of Independence and Constitution of the United States of America over 200 years ago, no one could have predicted the level of liberty Americans would enjoy in respect to how they lead their lives. The landmark judgment of the Supreme Court allowing for same sex marriage and joint tax filing has indeed fulfilled the wishes of thousands of people in that category. However, people of the gay community legally married in the California area still finding it difficult to understand the process of filing their joint federal tax returns for 2013.

Our CPA-licensed firm in Fresno, California has taken time to study the laws and help such couples in a simple and usable manner.

The first thing to note is that gay and lesbian couples would not be permitted to file their state tax returns in states where same-sex marriage is not yet in place; however, social security and other such joint federal taxes are allowed irrespective of the stance of the state on same-sex marriages. This law however exempts domestic partners who are not legally married. In other words, unmarried couples would file with two separate returns using the ‘married filing separately’ status in California.

Be that as it may, there are several variables that would affect the different tax liabilities of couples; issues concerning state of residence, total income per spouse, and the size of a fellow’s estate upon death are just a few such variables. The IRS ruling on August 29, 2013 following the Supreme Court’s judgment means that a child in the union can also be claimed as a dependent on the joint federal tax return of the couple; it also means that a child tax credit worth $1,000 would be granted if the couple’s gross income does not exceed $75,000 yearly.

Other than the IRS ‘Publication 555,’ other documents essential to see the process through include those from employers and financial institutions, etc. Same sex couples are allowed, since 2008 to file tax returns in California using the Form 540 Tax return provision. In the same vain, the Federal Form 1040 can be jointly filed in California to reflect the employee’s status as a married individual. On the other hand, all these benefits cannot be enjoyed if both are not legally married under the law.

Though the process is a bit complex, finding a competent Fresno Accounting firm qualified for Fresno Tax Preparation can reduce the complexity and make the process go smooth. IRS ‘Publication 555’ is the first place to start; understanding what it entails and how to abide by the rules is essential. However, knowing that people hate numbers, same sex couple tax preparation is made easy by our Fresno CPA firm; we are certified to carry out accounting and tax issues for our clients.

Having a competent and qualified tax preparer and accounting firm is critical to understanding the process and adhering to it; many people have been known to pay fines or serve jail terms because of a lack of understanding of the process. It is even more important to emphasize this point considering the fact that this is a new law and not many people – even some professional accountants, understand all the processes yet.

Summary

The article explains the need for a qualified Certified Public Accountant/tax preparer to help same-sex married couples to file joint federal tax returns especially in Fresno, California.

Links:

www.ftb.ca.gov/forms/2012/12_540bk.pdf

http://www.irs.gov/uac/Answers-to-Frequently-Asked-Questions-for-Same-Sex-Married-Couples

http://www.irs.gov/taxtopics/tc308.html.

 

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