Archive for February, 2012

US tax can be complicated for same-sex couples

I was in the USA recently and was interested to see an article in the newspaper USA Today reporting that same-sex couples sometimes face extra difficulties when it comes to paying their taxes. In the US, although there is an equivalent to PAYE (where your employer deducts your tax for you), almost all taxpayers complete a tax return detailing their income, allowable deductions, and the tax they should pay. This might be more or less than what your employer deducted, so you may have to pay the difference or request a refund.

The problem for same-sex couples occurs because of two details of the American tax / legal system. Firstly, married couples can file a joint tax return, rather than filing two separate returns. Filing a return can be a laborious process, and sometimes it is necessary to pay a tax consultant to complete it for you, so filing only one can save time and money. Sometimes, filing a joint return actually leads to less tax being owed, an obvious benefit. Secondly, same-sex marriage is not recognised by the federal government (i.e. the country) but is recognised by some states (e.g. Massachusetts). What this all adds up to is same-sex couples having to file different tax returns at the state and federal levels – a joint return for their state (if it allows them to submit joint returns) and separate returns for the federal government. This can cost couples more in tax consultant fees (as there are more forms to submit) and can cost them more in tax as they miss out on the tax benefits of being a married couple.

At the moment it doesn’t appear that this problem is going to go away – not soon, in any case. You can learn more about US Federal Income Tax on the US Salary Calculator.

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Sunday, February 26th, 2012 Foreign Currency, Income Tax No Comments

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Why under employment bumps up insurance costs

[Guest Post]

Unemployment in the UK has edged closer to the three million mark, and is at its highest level since 1996. As well as not having a regular source of income, unemployed drivers are more likely to be hit by higher payments for car insurance. Motorists who are out work are being advised to shop around for better deals on websites such as moneysupermarket.

An investigation carried out by the BBC revealed that car owners without a job are, on average, paying around 30% more for their insurance than motorists with full-time jobs, while their premiums are potentially 63% higher. There are a few reasons why unemployed drivers are seen as risky by some insurers.

Peter Harrison, an expert on motor insurance from MoneySupermarket explained why: “This is partly because unemployed people are more likely to use their cars during the day and to drive up and down unfamiliar routes to a job interview. Also, some insurers perceive a drop in financial security as a result of losing a job means someone in that situation is more likely to make a claim, hence the rise in the price of premiums”.

When out of work, your car is vital in helping you find a new job, but the impact of losing income means you might struggle to keep up with payments on credit cards and mortgages, which could hit your credit rating. A poor credit rating could also impact upon the price of car insurance. This is why it pays to look for the best deal possible.

With the help of a price comparison site like MoneySupermarket, you can find a car insurance deal which can save you much-needed cash, but there are other ways to help you keep the cost down at a time when you need to tighten your belt. Getting a new quote could save money, as it could go down every year (£2.4bn is wasted by motorists by accepting renewal quotes). Adding someone with more driving experience to your policy could also drive the cost down.

Reducing your mileage could prove helpful. As well as saving on fuel costs, your insurer could take notice and slash the cost of your policy. Keeping in touch with the insurer about your current circumstances is also a good way to save money. Telling them about losing your job as soon as possible is important, as failing to do so could invalidate your insurance.

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Wednesday, February 22nd, 2012 Economy, Insurance, Jobs No Comments

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