Queercents

If you are already self-employed or just launching out on your own, taxes can be one of the most intimidating items, especially if all you’ve previously known is a simply W-2 from an employer.  If you leave a cushy corporate job for self-employment, the first tax year is the trickiest.  You may have earned a larger salary and paid quite a bit in federal taxes. Or, like many you used downsizing or a severance package to fund your start up. If that is the case, it becomes even dicier because your prior year taxes will be even higher than normal and then suddenly, boom, you’re in the self-employed ranks attempting to make a go of it.  The tax man doesn’t care. Uncle Sam will hit you with stiff penalties if you are not careful.

I recently met with another CPA to get a second opinion on my own finances.  Since I fall into this dicy boat, I want to make sure that I am not sitting here shell shocked next April and most certainly want to avoid fines and penalties because I underpaid taxes.  I was very surprised at what I found out. Read the rest of this entry »

For the penultimate post in the Reducing Pet Costs series, let’s talk about another great American tradition (besides pet ownership) - Taxes! While we may treat our pets like our children, we don’t have the benefit of claiming them as a dependant on our tax forms. Is this fair?

One of the most-emailed articles from this week’s New York Times, titled Pill- Popping Pets (requires free login) has this illuminating paragraph:

Marketers have a new name for the age-old tendency to view animals as furry versions of ourselves: “humanization,” a trend that is fueling the explosive growth of the pet industry and the rise of modern pet pharma. Americans forked over $49 billion for pet products and services last year, up $11.5 billion from 2003; other than consumer electronics, pet products are the fastest-growing retail segment. The market expansion is being driven both by more pets and by more spending per pet, especially by affluent baby boomers whose children have graduated from college. “I get asked all the time, ‘What is it with this humanization — do we suddenly love our pets a whole lot more?’ ” says David Lummis, who analyzes the pet industry for the market research firm Packaged Facts. “My theory is that it’s always been there, but it’s been sanctioned now. It’s not just the crazy cat lady. It’s marketers and all of this consumer advertising that have made it O.K. to spend tons of money on your pet.” Read the rest of this entry »

This is a guest post from Jeff Hammerberg, the founder of GayRealEstate.com, the largest company in the nation representing the rights of queer home buyers and sellers. These are his words…

The entire system of USA taxation favors real estate ownership in ways that make property owners green with cash, and investors in other kinds of tangible or intangible assets green with envy. For example, ownership of artwork, commodities, or stocks and bonds conveys few deductions - whereas real estate offers everything from mortgage interest deductions to breaks for those who reinvest capital gains from the sale of a residence.

But before we get too excited about our tax write-offs, it is important to remind ourselves that while the system favors real estate, the more overriding and dominant paradigm in the USA is that it favors all things heterosexual. If you happen to be gay, an entire menu of sweet treats at tax time may be removed from the table - or made more difficult to get. Read the rest of this entry »

Today is Tax Day in the US. Whether you procrastinated or filed early, tax season is ripe with opportunities to be reminded how we, as gays and lesbians are second class citizens in the eyes of the law. Bottom line - we pay more than our straight counterparts. In my opinion, this alone is a reason for supporting gay marriage (or at least some legal equivalent).

I was shocked and pleased to see that CNN brought this very disparity to light this week in their article “Gay Couples Face Higher Tax Bills”:

Most states ban gay marriage and don’t recognize same-sex unions in any way. Only in Massachusetts can gay couples legally marry. Since 1997, nine other states and Washington D.C. started offering civil unions or domestic partnerships that give some or all the legal protections of marriage.

Those protections include allowing gay couples to file state taxes jointly — and potentially save them money. But they can also make tax filing more complicated for the couples.

That’s because the state protections do not help with federal taxes. Under the 1996 Defense of Marriage Act, the government defines marriage as being allowed only between a man and a woman.

“You’re running one household,” said John Traier, a partner in the Butler, New Jersey, accounting firm Hammond & Traier. “But the federal government and a lot of states treat them as two households.”

When it comes to tax time the issues are plentiful. Read the rest of this entry »

The countdown to April 15th is underway. As we rush to complete our returns common errors are inevitable. A few extra minutes proofing your return can be invaluable. Todays Tax Tidbit discusses how to avoid typical tax return blunders.

1. Use correct social security numbers. Nowadays we commonly use our Social Security number for identification. We’re accustomed to regularly repeating the entire number or even the last four digits. Take your time when entering this number on your tax return. An error such as transposing numbers can cause massive delays in processing your returns.

2. Sign your returns. If you are not filing electronically, be sure to sign your tax returns. If you are filing electronically keep a copy of your e-file confirmation. If you’ve hired a tax professional, you’ll need to sign Form 8879 (e-file Authorization). Your preparer will keep that document on file in their office in case proof of your e-file authorization is required.

3. Mailing a hard copy? Use correct postage. Having your tax return mailed back to you for insufficient postage is frustrating. The USPS changes their postal rates frequently. Recently modified postage fees based on the size of the package you are sending. When in doubt, Read the rest of this entry »

There are 1.2 billion dollars in tax refunds waiting to be claimed from the 2004 tax year. This surplus exists because approximately 1.3 million people did not file a tax return for that period. And more than half of those tax payers will receive more than $500.

There is a three-year window to claim your refund. In order to collect a refund, a 2004 tax return must be filed by April 15th, 2008. If unclaimed, the funds become property of the U.S. Treasury.

Keep in mind, if you haven’t filed a return for 2005 or 2006, the IRS will hold your refund. The IRS may apply your refund to the amounts you owe for subsequent tax years.

Prior year forms are available on the IRS website or by calling 1-800-TAX-FORM (1-800-829-3676). For more information about filing prior year returns, send me an e-mail or contact your local tax professional.

April 15th is around the corner–29 days and counting. Many of us haven’t started our tax returns yet. Don’t worry. It’s not too late. Just be careful because the most common tax return mistakes occur when we are rushed for time. Simple errors in calculation happen to the best of us. Double checking your numbers can be invaluable.

If you’d prefer to eliminate the stress of the impending date, consider filing a 6-month automatic extension. Use Form 4868 to request the extension. This is one of the simplest IRS forms, as is less than half a page in length.

You can also obtain an extension to file your taxes if you pay all (or part) or your estimated tax due with a credit card. The IRS states your payment must be at least one dollar and you can pay by phone or over the internet. Call 1-800-PAY-1040 (www.pay1040.com) or 1-800-2PAY-TAX (www.officialpayments.com). There will be a convenience fee for these options. However, it will be based on the amount of the payment you are making.

Please be aware that an extension of time to file is NOT an extension of time to pay. If you owe taxes they will begin to accrue huge penalties and interest April 16th! Read the rest of this entry »

Giveaway alert: read this entire post for the chance to win!

Digits is the newly launched site from H&R Block created to extend the tax office experience and offer a place to connect with their customers online. Sounds kind of strange… or boring to say the least, but I have to admit, they’ve done “community” right.

Digits is your community, built with the latest technologies to help you share your thinking through text, images and video conversations. Digits highlights the connections between money, art, politics, the planet and people everywhere. You’ll get access to the tax and personal financial resources you’d expect from H&R Block … but there’s much more here than that. Serious debate? Sure. A little light-hearted banter? Absolutely. Digits is about money. It’s about life. It’s about you. Come be entertained and join in the fun.

The destination serves as a hub where the money talk lives alongside conversations about the rest of life because they’ve figured out that there’s more to life than taxes. Go check it out. By the way, it’s also really well designed in both look and function: gay creative types will appreciate that!

Here’s the win part: For my personal endorsement and this sought after link, they’ve offered Queercents readers three H&R Block Flash Drives containing TaxCut 2007 Premium Federal + State. It’s a $45 value and these reusable 1 GB USB Flash Drives contain everything you need to complete your federal and state taxes. The product demo is here if you’d like to understand what you’re trying to win. Read the rest of this entry »

By now you’ve probably heard of the Economic Stimulus Act, a $152 billion package to provide aid to the U.S. economy, signed into law last month. The new law provides for a credit on your 2008 tax return. Sounds great! But in reality the United States Treasury will be sending advanced payments on that credit. It won’t reduce the amount of tax you pay next year. When you file your 2008 return you won’t actually receive a credit. You’ll have to report that you already received the benefits.

The economic stimulus package has been highly controversial. Many people believe it won’t aid our faltering economy because the “credit” is not enough to offset the losses many of us incurred due to the declining housing marketing and plummeting stock market. Others think we will simply spend the money on items manufactured overseas further diverting the funds from our local economies. And I’ve yet to hear one single person say they won’t cash or spend the check!

It appears as though we can not do anything to prevent this additional debt from plaguing our future. The U.S. Treasury is not even offering the option to refuse this check and hold the credit until we file our tax return. That said, this tax tidbit discusses the basics of the rebate. To begin, it is based on four factors: Read the rest of this entry »

There’s only one activity I enjoy more than the slow, tooth-pulling agony of preparing my taxes: Preparing my taxes twice.

Lucky me! I just found out that I need to file an amended tax return for 2007, a realization that comes shortly on the heels of receiving a huge refund. I want off this emotional rollercoaster!

Why amend? I went back to school in September, so I took the Lifetime Learning Credit, on the advice of my tax prep software. However, yesterday I discovered that the school I’m attending doesn’t participate in federal student aid programs, even though it’s accredited and well-established.

In short: No FAFSA, and no Form 1098-T from the school. I can’t claim a cent in tuition tax credits. This means I will have to pay back a large portion of my refund. ARGH. Read the rest of this entry »