As an advisor, if you have same sex couple clients who have been married in a state that recognizes same sex marriage and they have paid taxes or used exemptions (income, gift or estate tax) based on separate status, you may consider whether they can and should file amended returns based on married filing status to recoup taxes or exemptions. And they should be advised to revisit their beneficiary designations and their estate planning documents if they have not done so already. … [Read more...] about Same Sex Marriages: Are You Filing Your Taxes Properly?
Spouses filing separate tax returns
A government-sponsored program, including coverage under Medicare Part A, Medicaid, the Children’s Health Insurance Program, and TRICARE;An eligible employer-sponsored plan;A health plan offered in the individual market;A grandfathered group health plan; orOther health benefit coverage (such as a state health benefit risk pool) as determined by regulation.An individual who timely completes the requirements necessary to receive benefits available under a government-sponsored program by the last day of the third full calendar month following the event that establishes eligibility is treated as eligible for the coverage no earlier than the first month that the individual may receive benefits. An individual who fails to complete the necessary requirements to receive government-sponsored benefits by the last day of the third full calendar month following the event that establishes eligibility, however, is treated as eligible for the coverage on the first day of the fourth calendar … [Read more...] about Treasury Department and IRS Issue Final Regulations Implementing Affordable Care Act’s Health Insurance Premium Tax Credit
Loosen Restrictions on Hardship Distributions from 401(k) PlansThe bill would eliminate two restrictions that currently apply to hardship distributions from 401(k) plans. First, IRS regulations currently require 401(k) plans to prohibit participants who receive certain hardship distributions from making plan contributions for six months after the hardship distribution. The bill would force the IRS to eliminate this requirement. Second, under current law, hardship distributions from 401(k) plans cannot include qualified nonelective employer contributions (QNECs), qualified matching employer contributions (QMACs), or earnings on elective deferrals. The bill would allow employers to make such amounts available for hardship distributions. Finally, for purposes of determining a participant’s eligibility to receive a hardship distribution, the bill would clarify that the participant is not required to take the maximum available loan available from the … [Read more...] about Tax Reform Contemplates Changes to Employee Benefits
ï1 According to the Joint Committee on Taxation, the Act’s revenue generators are projected to increase federal revenues by about $ 392 billion over 10 years. 2The revenue raisers borne by health insurers, plan administrators and health companies in the form of taxes and fees are not covered in this article.3Code § 1411; The Joint Committee on Taxation estimates that the 3.8% MC Tax will raise $123 billion over a 10-year period. This, it is expected to raise almost one tenth of the total revenues to support the Health Care Bill. 4FICA stands for the Federal Insurance Contribution Act. According to the Joint Committee on Taxation , the 0.9% HI Tax is projected to raise $ 86.8 billion over a 10-year period. 5Code § 1411(a)(1). 6Net investment income will not include tax-exempt interest and distributions made by qualified pension, profit-sharing, and stock bonus plans, qualified annuity plans, annuities purchased by … [Read more...] about The Lady, or the Tiger: Making Informed Choices in 2013’s Uncertain Federal Income Tax Environment
For wealthier couples, prior to portability the standard estate planning approach to minimizing the estate tax burden involved two steps. First, the couple was advised to divide their assets so that each spouse had assets worth at least the amount of the BEA. Said another way, the couple was counselled that neither should have assets worth more than the BEA unless and until the other spouse also had assets equal to the amount of the BEA. The second step was to create a separate "by-passing" trust for each spouse so that on the first death, the decedent's assets (at least up to the BEA) would be held in trust for the surviving spouse, rather than passing outright to the survivor. Because the trust did not qualify for the estate tax marital deduction, each spouse's estate was able to apply the decedent's gift and estate tax BEA to shelter his or her assets from estate tax. … [Read more...] about Should You Transfer Unused Gift and Estate Tax Exemptions to a Surviving Spouse? (Part I)