Not All Retirement Plans Must Be Amended for Windsor
April 7, 2014 (PLANSPONSOR.com) – The Internal Revenue Service (IRS) has released guidance on the treatment of marriages of same-gender couples with regard to retirement plans.
IRS Notice 2014-19 provides further instruction for qualified
retirement plans about the implications of the U.S. Supreme Court’s decision in
United States v. Windsor. Specifically, the notice:
Gives examples of Internal Revenue Code requirements
under which the marital status of the participants is relevant to the payment of
benefits;
Provides guidance about how to satisfy those requirements
in light of Windsor and Revenue Ruling 2013-17; and
Describes when retirement plans must be amended to
comply with Windsor, Revenue Ruling 2013-17, and IRS Notice 2014-19.
After the Windsor decision, the IRS issued Revenue Ruling
2013-17 (see “Same-Sex Marriages Recognized for Tax Purposes”), which says married same-gender couples are treated as married for
all federal tax purposes where marriage is a factor, if the couple is lawfully
married under the laws of: one of the 50 states; the District of Columbia; a
U.S. territory; or a foreign jurisdiction. The new Notice 2014-19 gives
additional guidance about how qualified retirement plans should treat the
marriages of same-sex couples.
Notice 2014-19 calls for a retirement plan to be amended if
its plan provisions are inconsistent with the Windsor decision. For instance,
if its terms are inconsistent with either Windsor or Revenue Ruling 2013-17, a
plan must be amended if it defines “spouse” by reference to Section 3 of Defense
of Marriage Act (DOMA), or only as a person of the opposite sex.
According to the IRS, not all plans need to be amended in
order to be in compliance. An amendment generally is not required if a plan’s
terms are not inconsistent with Windsor or with Revenue Ruling 2013-17.
The IRS notes in the new notice that where amendments are
required, plan must adopt them by the later of December 31, 2014, or the
applicable date under the IRS’ general amendment guidance for qualified
retirement plans, Revenue Procedure 2007-44.
A copy of IRS Notice 2014-19 can be downloaded here.
April 7, 2014 (PLANSPONSOR.com) – Last week, I asked NewsDash readers if they expected to get a tax refund this year, and if so, what they plan to do with it.
The
majority of responding readers (57.7%) indicated they file their tax returns on
time, but not early or last minute. Nearly one-quarter (24.7%) file their
return as soon as they get their W-2(s), while 12.4% wait until the last minute
to file. Slightly more than 5% said they usually get an extension to file their
tax returns.
More
than seven in ten respondents (71.1%) expect to get a refund this year, and
22.7% do not. Six percent said they don’t know whether they will get a refund.
Nearly
24% of those who will get a refund reported they will save or invest it. Twenty
percent indicated they will use their tax refund to pay on debt, and 15.3% said they will use it for a necessary expense, such as car or home
repairs.
Nearly
4% will use their tax refund for a discretionary expense, and 1.2% will donate
it to charity. More than 16% reported they will use their refunds for a
combination of saving, spending or donating. In“other” responses, selected by
20%, responding readers reported they would use their refunds for college
tuition or expenses, to offset next year’s taxes or use a refund from state or
federal to offset a payment to the other, and “to help cover the premium/tax
for my two under-employed college graduates who can’t afford health care.”
Many of those who offered
comments counseled that getting a refund means you let the government use your
money interest-free, but one reader noted “It’s easier to give the government a
little extra money each pay period than it is to come up with extra cash by
April 15th each year.” Editor’s Choice goes to the reader with some helpful
advice about what to do with a refund: “We have a ritual of identifying the
debt with the highest interest rate and paying the entire tax refund on that
debt. It is liberating! By next year, all we will owe will be student loans.
Onward in our quest to be debt-free!!”
Verbatim
Our
taxes are simpler these days, since the house is paid off and the young adult
children can no longer be claimed. Personal tax filing season seems to arrive
right after the October 15 5500 filing deadline. That annual nightmare is still
too fresh in my mind to not have some anxiety over filing the family taxes.
We
always have to pay additional monies. I prefer keeping my money all year until
I absolutely need to part with it!
My
son will be a college freshman this year so we had to file early in order to be
"considered" for financial aid. Refund? Don't get me started on the
inequities of FAFSA!
I
don't mind paying a little too much each year, and then receiving a refund
every year. It's a "forced" savings account. And while we don't earn
interest on it, it's less than a year, and when we receive our refund check we
pick a charity to fund and then save or invest the rest.
If
I owe money, they'll get it on April 15th. If I'm due a refund, I'll file as
early as I can.
As
much as I would love to say I invest it all...unfortunately life intrudes and
demands I pay medical bills not covered by insurance. That being said, I also make
sure I make a donation to the Diabetes Foundation each year. Someday soon, I
hope no one will ever have to deal with that awful disease.
Normally
I save any refund for property tax bill in December but this year must use some
of it for unexpected medical expenses that more than maxed out my FSA, thanks
to the government having reduced that resource.
Why
do people get excited about receiving a refund? It just means you provided an
interest free loan to the government. Better to aim to owe a small amount and
consider it an interest free loan FROM the government.
Wasn't
expecting a refund so it was found money. Sweet! Already in my bank account and
a portion sent to a local education charity.
I
use to build cushion toward unexpected or extraordinary expenses.
If
I get a refund, it is small as I don't want the government to use my money.
They can't handle their own!
Somehow I goofed in
my calculations last year and rather than owing money, we are now getting a
refund. I lost use of those funds over past 15 months.
Verbatim
(cont.)
If
I get a refund, I file as soon as I can. If I owe, it'll be last minute....
I
aim to owe around $500. No sense letting the government have my money for free!
We
try to manage our taxes so we don't have a refund or have to pay.
Got
a refund last year, so reduced our withholding, so get to pay this year!! I've
filed our return, but will wait until April 15 to send in the taxes.
Once
we figured out a couple of years ago that there were hidden tax increases each
year that left us perennially owing money at tax time, we started over
withholding. It's easier to give the government a little extra money each pay
period than it is to come up with extra cash by April 15th each year. Now we
get a refund and actually manage to save a little bit.
I
always get a refund - want to make sure I get back every penny from the mafia
we call the federal government
The
IRS is full of criminals and the government breaches their fiduciary duty to be
good stewards of the money we give them. They misuse our money when they pay
for things like the Michelle Obama's recent trip to China with her kids and
mother.
The
timing of filing our return depends on if we are getting a refund or not!
Getting a refund, file early...not getting a refund, file late March/early
April! Since we haven't gotten a refund in many years, it's tended to be a late
March filing. 🙂
I
know it doesn't make economic sense, but I choose to save money this way. I
typically use it to fund a large home project.
TurboTax
is not working well, bigtime.
We
typically get it done by the end of February. The best outcome is to neither
owe nor get a refund, but it seems many people think a big refund is a great
thing. My accountant says otherwise...
We have a ritual of
identifying the debt with the highest interest rate and paying the entire tax
refund on that debt. It is liberating! By next year, all we will owe will be
student loans. Onward in our quest to be debt-free!!
Verbatim
(cont.)
Anyone
who gets a large refund is nuts! It means you were loaning your money to the
government interest free for the year.
I
actually file by April 15 but first I file for an extension and pay in extra
money. That way my refund is used to buy I bonds. It’s the only way to get
paper I bonds.
My
taxes are simple so I estimate them before the year and adjust my withholding
exemptions to aim for getting a small return of $100 or less.
I
usually designate tax refunds to either pay down large debt, like a mortgage,
or to help pay for a vacation. Even though I know I'm going to get a refund I
usually wait until the end of March to file. This just isn't something I look
forward to doing every year.
I
am sure my husband and I have paid more than our fair share over the years, and
this year I just want to break even for a change.
I
estimate my taxes throughout the year and attempt to break-even. I don't
understand why some people are so excited about getting a tax refund. That just
means you had too much withheld and the government held your money hostage all
year long 🙂
Tax
refund partially funds annual Roth IRA contribution
To
the politico who paraphrases the well known "...render unto
Ceasar..." I say "Yeah, well, Ceasar is dead and has been so for a
long time."
People
who intentionally have too much tax withheld from their paychecks are giving
the country a free loan. Recalculate your withholding so that you get almost no
refund & instead invest that money that used to be withheld each paycheck
instead of getting only the principal back with no interest at the end of the
year.
file
on line w/ TurboTax
NOTE: Responses reflect the opinions of
individual readers and not necessarily the stance of Asset International or its
affiliates.