Tax Law Changes

As of October 2013, fourteen state governments (those of Massachusetts, California, Connecticut, Iowa, Vermont, New Hampshire, New York, Maine, Maryland, Washington, Delaware, Rhode Island, Minnesota and New Jersey) along with the District of Columbia, the Coquille Indian Tribe, the Suquamish tribe, the Little Traverse Bay Bands of Odawa Indians, the Pokagon Band of Potawatomi Indians, the Iipay Nation of Santa Ysabel, and the Confederated Tribes of the Colville Reservation issue same-sex marriage licenses.

For federal tax purposes, the IRS Service has a general rule recognizing a marriage of same-sex individuals that was validly entered into in a domestic or foreign jurisdiction whose laws authorize the marriage of two individuals of the same sex even if the married couple resides in a domestic or foreign jurisdiction that does not recognize the validity of same-sex marriages.
The rules for using a married filing jointly or married filing separately status apply to these married individuals.
Generally the two separate state returns will have to be filed using the filing status of Single or Head of Household

Same-sex couples will be treated as married for all federal tax purposes, including income and gift and estate taxes.
The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA and claiming the earned income tax credit or child tax credit.

Individuals who were in same-sex marriages may, but are not required to, file original or amended returns choosing to be treated as married for federal tax purposes for one or more prior tax years still open under the statute of limitations.
Generally, the statute of limitations for filing a refund claim is three years from the date the return was filed or two years from the date the tax was paid, whichever is later. As a result, refund claims can still be filed for tax years 2010, 2011 and 2012.
Some taxpayers may have special circumstances, such as signing an agreement with the IRS to keep the statute of limitations open, that permit them to file refund claims for tax years 2009 and earlier.

Legally-married same-sex couples generally must file their 2013 federal income tax return using either the married filing jointly or married filing separately filing status.
Individuals who were in same-sex marriages may, but are not required to, file original or amended returns choosing to be treated as married for federal tax purposes for one or more prior tax years still open under the statute of limitations.

The small employer health insurance credit provides that the maximum credit is phased out based on the employer’s number of full-time equivalent employees in excess of 10 and the employer’s average annual wages in excess of $25,400 for tax year 2014, up from $25,000 for 2013

After the occurance of Hurricanes Katrina, Rita and Wilma, Congress acted to eliminate the 10% of AGI limitation as well as the $100 subtraction. As of today 3/7/13 Congress has not acted to extend similar tax law changes for the victims of Hurricane Sandy. Taxpayers should contact their local Congressman and ask them to vote ASAP.
The current law is as follows:
After you have figured the amount of your loss, you must figure how much of the loss you can deduct. If the loss was to property for your personal use or your family's, there are two limits on the amount you can deduct for your casualty or theft loss.
1.You must reduce each casualty or theft loss by $100 ($100 rule). 2.You must further

This safe harbor method is an alternative to the calculation, allocation, and substantiation of actual expenses for purposes of satisfying the requirements of the Internal Revenue Code.
The new optional deduction is capped at $1,500 per year and is based on $5 a square foot for up to 300 square feet.
Homeowners using the new option cannot depreciate the portion of their home used in a trade or business nor deduct actual expenses related to the qualified business use of that home. Also, they may not carryover any excess deductions in any other taxable year.
The current restrictions on the home office deduction, such as the requirement that a home office must be used exclusively and regularly for business and the limit tied to the income derived from the particular business, still apply under the new option.

The limit on employee elective deferrals is $17,500 for 2013. ($17,000 for 2012) and $23,000 if age 50 or older ($22,500 in 2012)
The catch up contribution limit for employees 50 and over remains unchanged at $5,500.
Generally, all elective deferrals made to all plans in which you participate are aggregated to determine if you have exceeded these limits.