Health care reimbursements don’t ‘count’ for child support

A divorced father who was reimbursed each month by his employer for the amount he spent on family health insurance premiums didn’t have to count these payments as “income” when deciding how much child support he should have to pay, the Georgia Supreme Court ruled recently.

The couple had three children before divorcing. A judge ordered the father to pay $2,400 a month in child support. In calculating this obligation, the judge included as income the $935 a month that the father’s employer reimbursed him for family health insurance that covered the children.

The father appealed, and the state high court agreed with him. The court noted that the only reason the father received these reimbursements was that he paid the exact same amount to an insurance company each month as a premium. Since there was no reason to think that the father would continue to receive these payments if he didn’t pay for the health insurance, the court said it was wrong to treat the payments as part of the father’s disposable income.

Family support payments may be tax-deductible

If you’re paying alimony, you can deduct that amount on your income taxes. Child support payments, on the other hand, are not deductible. But sometimes there are in-between situations that are harder to figure out.

For example, while a California couple’s divorce was pending, the husband made “family support” payments to his wife and children under to a temporary court order. When he filed his tax return, he deducted the $24,500 in support payments he had made that year.

The IRS challenged the deduction. It claimed the payments weren’t deductible as alimony, because alimony payments aren’t deductible unless they terminate automatically if the spouse receiving them dies. [Read more…]

You’ve split up. Now who gets to keep Fido?

We tend to associate divorce with battles over child custody, the house and the bank account. But what about the dog?

Some 63 percent of American households own at least one pet, and spending on pets has tripled since the mid-1990s. Obviously, cats, dogs, and even hamsters matter greatly to people, so custody of pets after a breakup is going to matter as well.

But while you might think of your pooch as a member of the family, the law doesn’t agree. In almost every case, the law treats an animal as a piece of property. That means that if there’s a fight, a court will award the pet to one spouse or the other, without the opportunity for shared custody or visitation.

If one spouse can show a superior legal right to a pet – for instance, by proving that the pet was purchased before the marriage, or was inherited by that spouse alone or given as a gift to that spouse individually – then typically, that spouse will get to keep the pet. [Read more…]

Divorces involving dual citizenship can pose big problems

Divorces that involve the laws of two different states can be very complicated. But the complications grow geometrically when a member of a divorcing couple is also a citizen of another country, or holds dual citizenship.

In such a case, it might not be clear which country has jurisdiction over the divorce. And if a foreign country has jurisdiction, the rules can change dramatically.

Every country takes a different approach to women’s rights, acceptable grounds for a divorce, alimony, distribution of property, child support and custody. And sad to say, in some countries, the legal system is fraught with corruption or extremely biased against foreigners.

Things can get very complicated if a dual citizen wants to raise the children in his or her homeland – or if he or she takes the children there for a visit, and then decides not to return. [Read more…]

High court eases path to Indian adoptions

Adoption proceedings are always complicated, but this is especially true when a child who has some Native American ancestry is adopted by a family that doesn’t. That’s because a federal law called the “Indian Child Welfare Act” sets a very high bar for adoption in these cases.

The law was enacted by Congress in 1978 in response to a history of abusive child-welfare practices that often split up Indian families unnecessarily.

However, a new Supreme Court decision makes things a bit easier for non-Indian adoptive parents.

In that case, Dusten Brown of Oklahoma, a member of the Cherokee Nation, conceived a child with his girlfriend, Christy. The couple planned to marry, but split up during the pregnancy. Brown relinquished his parental rights to Christy in a text message. Christy then arranged for a South Carolina couple to adopt the child, and they took custody after the baby was born. [Read more…]

Supreme Court reminds divorced people: Update your beneficiary designations

One of the most important things a person can do after a divorce is to update his or her beneficiary designations, and indicate who should get the money in various accounts if the person should unexpectedly pass away.

A new ruling from the U.S. Supreme Court shows just how dangerous it can be to forget this step.

Most married people name their spouse as the beneficiary of their accounts, but in the stress following a divorce, they often forget to update these designations.

And even when people make an effort, they might not remember every account. Pensions, 401(k) plans, life insurance policies, brokerage accounts, bank accounts, and more may all have listed beneficiaries. [Read more…]

Don’t forget Form 8938 if you have foreign investments

If you own foreign investments, you may have an additional federal tax form to file this year.

Form 8938, “Statement of Specified Foreign Financial Assets,” is due April 15, 2014, and is filed as part of your individual tax return. You’ll use Form 8938 to disclose interests in certain foreign financial accounts when your ownership exceeds the reporting requirements.

What are the reporting requirements? They vary depending on where you live and your filing status. For example, say you’re married and live in the United States, and you’ll file a joint tax return for 2013. You’ll include Form 8938 with your tax return when the total value of your reportable assets on the last day of 2013 was more than $100,000, or if the value exceeded $150,000 at any time during the year.

Reportable assets include investment accounts you own that are held in foreign financial institutions, interests in foreign entities, and stocks or securities issued by foreign individuals or companies. [Read more…]

Check your eligibility for this business credit

The health insurance premium credit for small businesses has been available since 2010. According to a recent report, many businesses that qualify for this credit have failed to take it.

Even if your business hasn’t taken this credit in the past, you may want to look into it this year. For 2014, the credit increases from 35% to 50%. When you qualify, you can use the credit to offset your federal income tax liability by up to 50% of the cost of health insurance premiums you pay for employees.

Three general tests for eligibility are:

  • Employing fewer than 25 “full-time equivalent” employees. [Read more…]

IRS adjusts tax numbers for 2014

Each year the IRS adjusts certain tax numbers for inflation and tax law changes. Here are some of the adjusted numbers you’ll need for your 2014 tax planning.

  • Standard mileage rate for business driving decreases to 56¢ a mile. Rate for medical and moving mileage decreases to 23.5¢ a mile. Rate for charitable driving remains at 14¢ a mile.
  • Section 179 maximum first-year expensing deduction decreases to $25,000, with a phase-out threshold of $200,000.
  • Social security taxable wage limit increases to $117,000. Retirees under full retirement age can earn up to $15,480 without losing benefits.
  • Kiddie tax threshold remains at $2,000 and applies up to age 19 (up to age 24 for full-time students).
  • Nanny tax threshold increases to $1,900. [Read more…]

Note these upcoming tax deadlines

  • February 18 – Deadline for providing 2013 Forms 1099-B and 1099-S to recipients.
  • February 28 – Payers must file 2013 information returns (such as 1099s) with the IRS. (Electronic filers have until March 31 to file.)
  • February 28 – Employers must send 2013 W-2 copies to the Social Security Administration. (Electronic filers have until March 31 to file.)
  • March 3 – Farmers and fishermen who did not make 2013 estimated tax payments must file 2013 tax returns and pay taxes in full.
  • March 17 – 2013 calendar-year corporation income tax returns are due.

Great attorney all around!

Brian [Szela] is incredibly professional, up front and efficient. He made the whole process as smooth as possible. I Highly recommend him!

~Joanne, a child custody client

Before you buy a vacation home, do your homework

More and more people are buying vacation homes. In fact, vacation homes accounted for 11% of all residential real estate sales last year.

And most of these buyers plan to supplement their income by renting the home for part of the year. In a recent survey by the National Association of Realtors, 92% of vacation home buyers said they planned to rent the home within a year, and 76% said their purchase was motivated at least in part by the potential for rental income.

That’s great – as long as you do your homework and know what you’re getting into. Here are some things to keep in mind before you take the leap into becoming a part-time landlord:

  • If you plan to rent the home, you’ll need to tell your bank because the mortgage rules are different. You might have to put up a slightly larger down payment and/or pay a slightly higher interest rate. [Read more…]

Can condos and homeowner associations restrict medical marijuana?

A large number of states now permit medical marijuana, while other states have decriminalized the drug and two have voted to legalize it. But while medical marijuana might be helpful to the seriously ill, many condominiums and homeowner associations are worried about the effects of allowing pot-smoking on their property.

Apart from the fact that marijuana is still illegal under federal law, some residents are also concerned about an increased risk of crime (as the users’ “stash” might be a tempting target), the effects of second-hand smoke inhalation, and the exposure of small children to the drug.

But can the board of an association restrict the right to light up?

This is a brand-new question, and the law is largely unclear. [Read more…]

If you’re buying a fixer-upper, consider a special FHA loan

If you’re purchasing a “fixer-upper” or are otherwise planning to make major renovations to a home you’re buying, you might want to consider a special type of loan called a “203k” loan from the Federal Housing Administration.

These loans are specifically designed for homes that need major repairs, and they allow you to roll the cost of the repairs into the amount of your mortgage. They’re especially helpful for people who can’t afford an expensive home and are willing to buy a starter home that needs a lot of work. However, they can be used by anyone who wants to invest in a property that needs an upgrade.

The big advantages of 203k loans are that they usually allow a low down payment and they’re often available to people who don’t have great credit. [Read more…]

U.S. eliminates the most popular type of reverse mortgage

The most popular type of reverse mortgage for senior citizens has been done away with by the Federal Housing Administration.

In a traditional mortgage, you borrow money against your house and pay it back in monthly installments over time. With a reverse mortgage, you borrow money against your house, but you don’t have to pay it back until you die, sell the house, or move – which means you don’t owe anything as long as you stay in your home.

In most cases, to qualify you must be at least 62 years old.

In the past, borrowers could choose to receive a lump sum, monthly payments at an adjustable interest rate, or a line of credit. But the FHA has now eliminated the lump-sum option. [Read more…]

Supreme Court helps landowners to develop their property

A new decision from the U.S. Supreme Court will strengthen the hands of many landowners who are battling with local authorities over development of their property.

The decision makes it harder for municipalities to demand financial concessions from owners in return for land-use approvals.

The case involved Coy Koontz, who owned 15 acres of land near Orlando, Florida. Much of the property was wetlands, and as a result, in order to develop it, Coontz had to negotiate with the local water management district.

Coontz proposed what seemed like a reasonable deal: He would develop 3.7 acres along the northern edge of the property, and in return he would agree never to develop the remainder. He offered to give the district an “easement” allowing it to prevent any future development on the remaining acreage. [Read more…]

Social Security retirement benefits may be taxable

Social Security retirement benefits by themselves are generally not taxable – but people with even a modest amount of income in addition to their Social Security payments may end up having to pay taxes on their benefits.

The tax result is determined by something called “combined income,” which is one-half of your Social Security income plus all your additional income (including non-taxable interest).

For married couples, if your combined income is between $32,000 and $44,000, you may have to pay tax on up to 50 percent of your benefits. If your combined income is more than $44,000, up to 85 percent of your benefits may be taxable. [Read more…]

Protecting your home from Medicaid’s ‘estate recovery’

After a Medicaid recipient dies, the state will attempt to recoup whatever benefits it paid for the person’s care from his or her estate. This process is called “estate recovery.”

For most Medicaid recipients, their house is the principal asset available. Unfortunately, this usually means that the state can order a sale of the house, and the person will be unable to leave his or her family home to his or her family.

There are some techniques, though, that may help protect at least a share of the family home. How well these techniques work depends in part on the state where the Medicaid recipient lives and where the house is located, but it’s worth exploring with an attorney whether they would work for you. [Read more…]

Can an assisted living facility kick someone out?

It’s not uncommon for an assisted living facility to try to force a resident out, or to refuse to renew the person’s lease.

Often, the reason is that the facility believes that the resident’s condition has deteriorated to the point where it can no longer provide all the services that he or she needs.

But there might be other reasons, too. Some facilities don’t want to keep people who are eligible for Medicaid, even if the facility is approved to participate in Medicaid. And sometimes a resident is simply viewed as a “troublemaker.”

If you or someone you know is facing an assisted living discharge that you believe is unfair, it may be possible to fight it. The legal rules, however, are often unclear, and vary a great deal from location to location. [Read more…]

Expanded Medicare coverage for chronic conditions now in effect

Seniors who have chronic illnesses and disabilities can now get Medicare coverage for skilled nursing and therapy services … even if those services will simply maintain the person’s present health status and aren’t likely to improve their condition.

This is very important news for people who have diabetes, heart disease, Alzheimer’s disease, multiple sclerosis, Parkinson’s disease, Lou Gehrig’s disease, arthritis, or the effects of a stroke, among other conditions.

Earlier this year, the government agreed to settle a class action lawsuit over this issue. That settlement has now been approved by a federal court – and what’s more, the settlement has been made retroactive to January 18, 2011, so if you were denied coverage for services after that date, you might be able to go back and re-apply for coverage. [Read more…]

How to choose the Medicare drug plan that’s right for you

Choosing the best drug plan under Medicare Part D isn’t always easy. Some people just pick the plan with the lowest premium, but that plan might not be the best value for you, depending on your needs.

The real cost of a plan depends not only on the premium, but also on the availability of the drugs you need, your additional out-of-pocket costs, and how convenient it is to obtain your medications.

Here are the key factors to consider (besides the premium) when deciding on a Part D plan:

► The formulary. A plan’s “formulary” is the list of drugs it covers and will pay for.  Does the plan you’re considering include all the drugs you need, or anticipate needing? How much will they cost?  [Read more…]