Taxes 
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How the IRS ruling affects same-sex couples’ taxes

Gay pride 013 - Marche des fiertés Toulouse 2011.jpgThe recent ruling by the U.S. Supreme Court that the federal government has to recognize gay marriage is impacting a number of people, as well as policies.

Among the policies that are being affected by the DOMA ruling are tax policies. Immediately after the ruling came down, there were questions about how the IRS would handle same-sex marriages at tax time. Recently, though, the IRS ruled on how it will proceed.


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 Taxes 
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What is the Average Tax Refund?

average tax refundAs of March 22nd, the average tax refund stands at just a hair under three thousand dollars. At this time last year, the average was a little over that amount, sitting at $3,030 (the average for last year would later fall to $2,803 as later filers were accounted for).

As is always the case earlier in the season, this average will likely go down. It’s usually higher because people due refunds tend to file earlier than those who are not expecting one. If you were due a refund, it may make sense to adjust your tax withholding as you don’t want to give Uncle Sam 25% of your income.

I wanted to dig a little deeper on the question of average income tax refund because nearly three thousand dollars seems really high but it actually isn’t. It took a bit of searching but after some research into their SOI Tax Stats page, I was able to glean a few gems about the average tax refund.

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 Cars 
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How to Donate a Car

Donate Your CarWe listen to a lot of NPR (WAMU) and every so often we’ll hear a pitch to donate our “used vehicle, RV, boat or airplane.” We considered donating our private jet, seeing as how they’ve fallen out of favor ever since the auto company CEOs used theirs to a Congressional hearing, but just haven’t pulled the trigger yet.

One thing we have done, though this predates our appreciation of NPR by several years, is donate a used car to a charity. About seven years ago, my wife’s car died (blown head gasket) and it didn’t make financial sense to repair it. We were looking around at our options and decided that donating it to a local school was the best option for us (I mentioned the car in passing in my post on why you should donate your car).

So how do you donate your car? It’s a simple three step process.

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 Taxes 
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Fun Facts About the 2010 Tax Season

Taxes!If you’re a personal finance stats junkie like me, you’d love the IRS Data Book. It is chock full of fun and interesting statistics that give you a glimpse of one of the more private havens in one’s life – their tax return. While you can’t sneak a peek at your neighbor’s return, you can guess some interesting facts about American society through our tax returns.

I take a romp through the IRS Data Book and pull out a few fun statistics that I found interesting, or surprising, and I hope you enjoy them too. All of the data is taken from the Excel spreadsheets for Fiscal Year 2010 but they also issue a PDF that summarizes some of the higher level statistics.

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 NEWS 
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IRS Audits 80% More Rich Taxpayers

Robert Frank at the WSJ looked at the latest audit statistics in the IRS Data Book and discovered that the IRS audited more than 18% of returns with income of at least $10 million. This is an increase of 80% from 2009, when only 10% were audited. Audit rates increased for other income groups as well, though most sharply for the higher brackets.

If you look at the statistics, it’s actually quite fascinating. Every income range in the Data Book showed an increase in audits, though the $10mm or more crowd saw the greatest jump. Here are the increases:
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 Taxes 
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What is Form 6251: Alternative Minimum Tax

Form 6251 AMTForm 6251: Alternative Minimum Tax (Individuals) is the form taxpayers must fill out to determine whether or not they are subject to the dreaded Alternative Minimum Tax (AMT). The AMT is another way of calculating your tax liability and those subject to its wrath will see their tax liability increase, as certain deductions are disallowed under AMT.

As scary as the AMT itself is, the form is only two pages with 54 “questions.”

Simple, right?

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 Your Take 
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Your Take: Plans for Your Tax Refund?

Last year, the average tax refund was a cool three thousand bucks. While we don’t know what the average tax refund will be for the 2010 tax year, chances are it’ll be pretty sizable as a result of all the different stimulus and tax credits of the last year. While I’ve long talked about adjusting your tax withholding (and reasons why you wouldn’t want to adjust), most people don’t do it. Some people are concerned about penalties, others prefer this “forced savings,” and others just don’t want to bother.

We learned yesterday that most people were planning on paying down debt or putting it towards savings, while others were going to buy a big ticket item or go on a vacation. The question we have for you today is – what do you plan to do with it? Save for a rainy day? Spend it on a vacation or new television? Put it towards a downpayment or against existing debt?


 NEWS 
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Some Americans Plan Fun for Tax Refund

The National Retail Federal did a survey recently that asked Americans what they were going to do with their tax refund this year. 13.2% said they would be buying a big ticket item like a new television or some furniture, up from 12.5% last year. 11.9% plan on taking a vacation, which is more than the 10% who planned on taking a vacation with it last year. 29.7% went with the ho-hum answer of spending it on everyday items.

Before you start complaining about people being irresponsible, it turns out that most people will either pay down debt or put it towards savings. 41.9% will use their tax refund to pay down debt, 42.1% will be using it for savings. What’s interesting is that since 2007, the percentage of respondents who said they’d pay down debt went up and then down, peaking at 48% in 2009. 41.9% is the lowest it’s been since 2007, when it was 43.1%. Savings rates, however, have been steadily increasing since 2008. (One caveat, this was a survey of what people planned on doing with their refund… how many actually saved or paid down debt is another story!).


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