The Internal Revenue Service is giving the Mega Millions jackpot some serious competition, with tax refunds totaling $760 million ready to be handed over to an estimated 918,600 taxpayers who did not file a federal income tax return for 2010.

Laws were passed a couple of years ago that permanently set the federal tax exclusion amount on estates at $5,000,000. The law also stipulated the exclusion amount should be indexed for inflation each year. The exclusion amount for 2014 is $5,340,000. This means there is no federal estates taxes if the deceased has an estate less than $5,340,000 and no federal estate tax return needs to be filed.

Many taxpayers overlook this possible filing status when deciding how to file their tax returns. This is epically true among recently divorced couples when there is a still dependent child in the home. While filing as Head of Household will lower your taxes vs. filing as “Single”, you must follow the IRS guidelines to avoid inquiry or audits.

Last week we looked at the new 3.8% Medicare Surtax that was ushered in as a result of the ObamaCare tax package that was passed in 2010.

If you were legally married on 12/31/13, the IRS considers you married for the entire year of 2013.

Several months ago (TTW # 216) we discussed the ruling by the Department of the Treasury and the Internal Revenue Service that same-sex couples, legally married in states that recognize their marriage, will be treated as married for federal tax purposes.