By: Julia Frey. The income tax bill for 2013 may be a rude awakening for many people. Even if you had the same amount of income in 2013 as you did in 2012, your tax bill WILL increase and may increase by a significant amount; some pundits opine a minimum of 7%. Remember, that income taxes can go up to 39.6% and capital gains taxes have increased for high income wage earners. There may also be an additional 3.8% Medicare tax on investment income. Itemized deductions have also been reduced for high income earners.
Government Shutdown Does Not Affect October 15th Tax Filing Deadlines
By: Amanda Wilson
As a result of the government shutdown, IRS operations are extremely limited and most IRS personnel have been furloughed. During this shutdown, the IRS will not be processing tax refunds. However, taxpayers should not view this shutdown as impacting their tax filing obligations. Specifically, taxpayers that filed an extension for their personal income tax returns should still file by the October 15th deadline. For more information, please see IRS Operations During Lapse in Appropriations.
IRS Provides Administrative Guidance to Employers in the Wake of Its Recognition of Same-Sex Marriage
By: Amanda Wilson
Last month, the IRS announced that same-sex marriages would be recognized as marriages for federal tax purposes. It is important to recognize that this position extends beyond individual income tax consequences and can impact employers as well. A number of income tax and employment tax provisions exclude from gross income and wages certain employee benefits provided to the spouse of an employee. Before last month, the IRS took the position that benefits paid to same-sex spouses of employees did not qualify for these exclusion provisions. The IRS has now changed its position and has stated that this change can be applied retroactively. As a result, employers may find themselves in the situation of having overpaid employment taxes for employees that have a same-sex spouse. The IRS has issued Notice 2013-61 to provide guidance to employers on how to deal with this situation. Employers that have employees with same-sex spouses should be aware of this notice and consider how it may apply to them.
IRS Recognizes Same-Sex Marriages for Federal Tax Purposes
Yesterday, the Internal Revenue Service stated that individuals of the same sex will be considered lawfully married for federal tax purposes if they were married in a state that allows same sex marriage. This recognition will apply even if the couple resides in a state that does not recognize or allow same-sex marriage.