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Tax Blog
“Taxing” is a word synonymous with “onerous” and “wearing.”  Bond Beebe, Accountants & Advisors, have created a user friendly blog called “It’s Taxing” to inform and educate our clients and business associates on timely topics related to tax, estates, accounting and finance.  We hope our blog answers your questions and alleviates the heavy burden and anxiety related to understanding complicated tax laws and related matters. 

 

Virginia Recognizes Same-Sex Marriages for Tax Purposes


Last year, The Supreme Court ruled in United States v. Windsor that same-sex married couples could be treated as married under federal law.  This had broad implications for US federal taxes for same-sex married couples, but at the state level the laws continued to vary state by state.  When the IRS issued its guidance, they clarified that for tax purposes the IRS would recognize any marriage entered into legally in a state that allowed the marriage, regardless of current residence. 

In states like Maryland or the District of Columbia, which allowed same-sex marriages to be performed in the state and also recognized same-sex marriages entered into legally in other states, the federal tax law and state tax law were now in parity.  States that had not yet recognized same-sex marriage, however, like Virginia, were left to their own to determine how to treat same-sex couples residing in their state, even if they were legally married elsewhere.  Virginia initially ruled that it would not recognize the marriages, and couples would have to file separate state tax returns, even if they filed a joint federal tax return.

On October 6, 2014, the US Supreme Court declined to weigh in on a case (Bostic v. Schaefer) challenging Virginia’s ban on same-sex marriage.  The US District Court and Circuit Court of Appeals had both ruled the ban unconstitutional, and when the Supreme Court refused to hear the case, the decisions that held the ban on same-sex marriage unconstitutional were upheld.

As a result, a day later the Virginia Department of Taxation issued Tax Bulletin 14-7 clarifying that Virginia would now recognize, for state income tax purposes, a same-sex marriage that is recognized for federal income tax purposes.  Similar to the IRS guidance, a same-sex married couple who filed a joint federal tax return can choose to (but is not required to) amend previously filed returns within the three-year statute of limitations. 

The state income tax landscape continues to evolve quickly on this issue, but for now Maryland, DC and Virginia (among other states) are all in agreement with the federal tax treatment of same-sex marriage.  If you have any questions, please contact us or consult with your tax advisor.  Stay tuned for more updates as this issue evolves.

Tax Principal Brian Wynne Discusses How Your Tax Filing Status Affects What You'll Pay

Bond Beebe Principal, Brian Wynne, was recently quoted in a Business Insider article about common life changes and how they affect your tax bill.  Click Here for the full article.

Inherited IRA's Not Protected from Bankruptcy

It is now official that inherited IRAs are not considered “retirement funds” within the meaning of federal bankruptcy law and therefore are not exempt from a bankruptcy estate. This ruling was handed down by the Supreme Court in the case of Clark, et ux v. Rameker on June 12, 2014.

Typically, retirement funds (IRAs and Roth IRAs) are exempt from a bankruptcy estate and therefore shielded from creditors in bankruptcy. This was done to help debtors to provide for their retirement, even after bankruptcy. However, the Supreme Court ruled that inherited IRAs do not qualify as retirement funds.

Retirement Planning: Roth vs. Traditional 401(k) Plans

roth-vs-traditional-401kThis post was written with the assistance of Ashleigh Zeller from the Firm's Benefit Plan sector.  

With many employers now offering a Roth 401(k) component with their retirement benefits, you may be wondering which option works best for your retirement planning purposes. Like most questions involving tax planning matters, the answer is rarely straightforward.

In this post, we’ll look at the differences between Roth and traditional 401(k) plans, as well as Roth IRA and Roth 401(k) plans, and cover some of the tax consequences you may incur when using these retirement savings strategies.

Hiring your Children in your Business – It’s Not So Taxing

hiring-your-kidsIf you own a business, employing your child can be a great opportunity to teach valuable lessons about earning, saving and hard work. It is also an excellent tax-savings strategy for you and your child. However, before you bring your college kid on your payroll for the summer, there are a number of regulations and savings strategies to keep in mind.

Maryland State & County Tax Credit Ruling - Wynne v. Comptroller Update

wynne v comptrollerThe U.S. Supreme Court has agreed to hear the case of Md. Comptroller of Treasury v. Wynne, (U.S., No. 13-485, cert. granted, 5/27/14) on whether a taxpayer’s resident municipality can tax all of a resident's income or if it must provide a credit for taxes that person paid to other states. This case specifically addresses Maryland’s denial of credits against the MD county income tax; full details are available in our previous post on this case.

IRS Announces New Payment System: IRS Direct Pay

irs-logoIn an effort to provide taxpayers with more service options, the IRS has announced the start of a new web-based based payment system called IRS Direct Pay. Individual taxpayers filing 1040 return series can use IRS Direct Pay 24 hours a day, 7 days a week to pay any balance due on their tax returns or make estimated payments without incurring any additional fees or having to pre-register.

Some of the key features provided by IRS Direct Pay include:

  • Identity verification using information from prior year tax return
  • Instant confirmation that the payment has been submitted
  • 30-day advance payment scheduling
  • Payment rescheduling or cancellation
  • Payment status search

While the current system is limited only to payments for 1040 returns, the IRS has plans to expand the service and offer additional options for users and will most likely add additional payment types in the future. Other future expansions include payment confirmations via e-mail and a login option that would allow users quick access or return visits.
For more information, check out the IRS’ News Release and FAQ for more information.

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A Change to the IRA Rollover Rules

ira-rolloverA Tax Court ruling in January 2014 (Bobrow; TC Memo 2014-21) changed long-standing IRS rules defining when and how often you can rollover money tax-free from one IRA to another.

A “rollover” is defined here as withdrawing money from an IRA and then re-depositing it in the same or a different IRA within 60 days of the original withdrawal. These are considered tax-free transactions and are generally used to change the investment custodian or manager. They are occasionally used as a short term loan. You are allowed to do this once in a 12 month period.

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