Depending on the nature of your job, you may need to start thinking about your 2008 taxes sooner rather than later anyway. I filed a little later than usual this year because I get paid for both of my jobs as a "1099er," meaning that I cannot withhold funds from my paychecks for tax purposes, and cannot get my Social Security contributions matched by my employers. This was my first year filling out the Schedule C, the form that allows individuals classified as "self-employed" to figure out what they owe. I had to fill it out not only for 2007 but also unofficially for 2008 so that I could estimate my quarterly tax payments--another quirk of getting paid as a consultant. If you're a 1099er like me, make sure to look at your options for paying every quarter instead of waiting until the end of the year--you actually incur a large penalty if you don't take advantage of the quarterly estimated payment system. Also, doing quarterly payments prevents you from getting any nasty surprises on tax day and makes financial planning much simpler.
While signing our New Jersey tax forms, my husband battleandrew and I were pleased to note that "Spouse/CU Partner" has replaced "Spouse" on the signature line. This brings up an important question, though: how should individuals in states that offer civil unions to same-sex couples go about filing their federal taxes, given that the federal government as a whole does not offer this option for classification? Some tax preparers recommend simply filing a joint married return at the state level and continuing to file as single individuals at the federal level. Other preparers suggest that filing under two separate relationship categories may cause administrative problems and headaches for the couple, so they recommend filing as married at both levels.
I don't know enough about the tax system to weigh in one way or another, but fortunately, the good people over at Gay.com do. Check out their Queer Tax Guide for the lowdown on tax issues that LGBT individuals commonly face. This clear and concise guide provides information not only on the question of how to categorize a relationship for filing purposes, but also on individual municipalities' fiduciary treatment of civil union partners and some of the legal battles that have arisen over tax issues since the advent of civil unions. It also deals with more subtle tax questions such as estate taxes and trust funds, and offers clever tips on getting extra deductions--such as giving away unused clothing and household items to charity.
For solid tax advice as well as more general financial strategy assistance, you may also wish to add QueerCents to your bookmarks. Updated frequently, this blog for the LGBT community boasts several categories of posts related to taxes and financial planning. If you're looking to improve your financial strategy for the year ahead or figure out whether to take standard versus itemized deductions on your 2008 tax forms, QueerCents is a great place to start. Likewise, their financial articles cover more general topics on money management, including real estate, retirement savings, student loans, and even pet ownership.
Looking beyond 2008 to the longer term, issues such as wills and trusts gain paramount importance in financial planning regardless of your gender or orientation, but can become particularly difficult to navigate for LGBT individuals whose relationship status may not be recognized in the same way by every branch of government. We've stocked a number of books in our Legal and Financial Issues section to help you make sense of your options. If you've never managed your own finances before, these texts make a great starting point. Good financial planning can reduce your stress level significantly--especially around this time of year. If you have children and/or nieces and nephews, learning about financial management strategy and tax codes also enables you to pass good financial sense on to your loved ones. The money management skills that I've learned from my parents--especially my father, who over the years has become quite savvy about tax issues and the stock market--have made a tremendous impact on my ability to enjoy a comfortable life while planning for the future.
Hopefully most of you will get a little of your own back from the federal stimulus bill that passed earlier this year. If you want to get your stimulus money faster, make sure to take advantage of the Direct Deposit option offered on the forms--Andrew and I have done this whenever we've been owed money, and it greatly reduces not only the wait time but also the anxiety of rifling through your mail every day to see if your check came. To see if you'll get a stimulus payment, you can either check the reverse side of the stimulus-related IRS mailer that went out last month or visit the IRS website. The website also offers an automated refund tracker that allows you to view the status of your refund check by typing in your Social Security Number.
If any of you have additional tax tips to offer or a good resource to recommend, don't be shy--leave a comment here and share the wealth!