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Thursday, December 11, 2014

Filing status challenges and developments

This year there were a few cases and IRS rulings where a married couple tried to change their filing status. Two of the cases involved a couple who split up at year end (before the time to file that year's return). The cases are a reminder of the rule on when a married couple may amend a return to change from MFS to MFJ (before the statute of limitations runs out) and from MFJ to MFS (before April 15).

Also, in 2014, a few states that did not recognized same-sex marriage now due because of litigation challenging state law (such as Virginia and Wisconsin).

I've got an article in the AICPA's Tax Insider today (12/11/14) on these developments - here. We probably think that identifying your filing status for your income tax return is one of the easiest things to do. These cases show that there can be challenges.

On December 10, Congressman Camp, soon to retire from Congress, officially introduced his Tax Reform Act of 2014 which has been out as a draft since February 2014, as H.R. 1. That is the bill  Congressman Boehner held open for tax reform. Camp's proposal resolves one challenging filing status question - is someone entitled to use the favorable head-of-household status? Under his proposal, the question goes away as he'd repeal that filing status!

What do you think about filing status and tax reform?

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