Important Tax Tips for Gay & Lesbian Partners and Unmarried Couples

gay coupleGay marriage, though legal in a number of states, is not recognized by the Federal Government. This means, among a whole host of other issues, that same-sex couples do not enjoy the same tax breaks as married heterosexual partners in the United States.

As frustrating as that may be, the good news is there are still ways you can lower your tax bill come the tax filing deadline. And this advice isn’t great just for same-sex partners – any unmarried,  financially interdependent couple can benefit from the following tips.

Ways to Reduce Your Tax Burden

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What Is the Gift Tax – IRS Rules, Rate & Maximum Exclusion Limit

gift tax moneyAre you considering transferring wealth, assets, or property to your heirs? You may be in for a much more difficult – and costly – procedure than you realize. While giving to those you love is wonderful, you must be aware that giving isn’t free.

If you’re in a position to help out younger family members or friends, or if you’re contemplating how to best transfer your estate to your heirs, it is crucial to understand gift tax regulations. Some gifts aren’t subject to any tax, but many are. A quick study of the numbers and rules can prevent you from taking an unnecessarily large tax hit and help you plan how to transfer your wealth. In addition to familiarizing yourself with gifting rules, contact an estate planner or attorney to make sure your heirs receive everything they’re entitled to.

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Claiming Qualifying Dependents on Taxes – IRS Tax Dependent Definition & Rules

family children tax dependentsAs any parent knows, dependents are a great way to get tax deductions. Everyone in the U.S. is eligible to receive a “personal exemption” of $3,950 on their taxes. However, if they don’t support themselves (such as children), their personal exemption can be transferred to the person who does support them (such as their parents), by claiming them as dependents.

If you have people in your household that you support, each one may be considered a dependent and can reduce your taxable income by $3,950. However, there are specific rules that must be met in order for this to occur.

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4 Tax Deductions for Self-Employed Freelancers and Small Business Owners

cash calculators deductionsWhen you start your own business, it can seem like there’s always something else to spend money on to keep things running smoothly. Fortunately, most of these expenses are tax-deductible. The IRS defines a deductible expense as something that is ordinary and necessary – in other words, it must be something you need to run your business, and that is commonly used by others in your line of work. For example, a mobile dog groomer could reasonably write off a new washtub. However, it might raise some eyebrows if a graphic designer put a bathtub on the company credit card.

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IRS Home Office Tax Deduction – Rules & Calculator

home officeIf you own a small business or do freelance work from home, you can get a nice self-employment tax break by using the home office deduction.

Simply put, the home office deduction allows you to deduct a portion of the cost of running your home as a business expense, proportional to the amount of your home you use for business. You can also take this deduction if you have been asked to work at home by your employer.

This can save you a lot of money if done properly – but you need to be careful, as it is one of the most commonly abused tax deductions.

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IRS Tax Evasion Fraud Definition & Penalties – What Happens If You Don’t File or Pay Your Taxes?

man surprised tax formsAdmit it. At some point during tax prep – filling in one too many data fields or just finding out the final total you owe to Uncle Sam – a dangerous thought crosses your mind: What if I just don’t file?

While most people resist the urge to simply skip out filing taxes, what happens if you can’t pay your taxes, or if you just don’t file at all?

Here are some of the details on tax evasion, including some of the penalties involved, as well as what you can do to prevent a sticky situation even if you can’t afford to pay.

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4 Job-Related & Job Search Expenses That Are Tax Deductible

careers peopleIf you are an employee and spend your own money on business travel, or are presently searching for work, you may be able to deduct work-related expenses on your taxes. These expenditures can add up greatly over time, but by being aware of which expenses provide tax advantages, you can greatly offset their cost. Knowing which expenses you can deduct under what circumstances can help maximize your refund or reduce the amount of tax you owe.

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Retirement Savings Contribution Credit – Get a Tax Credit Just for Saving

retirement savingsUncle Sam wants you to save for retirement. However, saving for retirement can be difficult, especially if your income isn’t very high. The saver’s credit – in IRS parlance, the “Credit for Qualified Retirement Savings Contributions” – can help by giving you up to a $1,000 non-refundable tax credit.

To take advantage of this credit, you need to make a contribution to a traditional or Roth IRA by April 15, 2015, or have contributed to your 401k (or similar workplace retirement arrangement) by December 31, 2014. In addition, you must meet the income restrictions for your filing status and other requirements as well.

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Tax Deductible Job Relocation Moving Expenses

movingDid you recently move for a new job? If so, you may be able to claim your moving expenses as a tax deduction. After all, the cost to move can be quite high, especially when you factor in labor, the cost of a truck, gas, or hiring a moving company outright. Taking this tax deduction allows you to offset the high cost to move by reducing your tax bill.

In order to qualify for the deduction, make sure you meet the following requirements and fill out Form 3903.

Requirements for Moving Expense Deductions

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Married Filing Taxes Jointly vs. Married Filing Separately – Which Is Better?

married couple computer taxesOnce per year, married couples have the option to get a short, amicable separation – at least, as far as the IRS is concerned. If you’re married, you have a decision to make when tax time rolls around: Should you file jointly or separately?

Choosing a filing status does not reflect upon your marriage – it’s about making the best decision for your financial situation. Since each method of tax filing has its own set of benefits, you may find that filing separately benefits both you and your spouse more than filing jointly, or the other way around.

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