U.S. slams local bakery for poor Spanish translation

A bakery in Chicago was facing a union election, and it warned its employees that if they joined a union and held a strike, it would “exercise our legal right to hire replacement workers.” It then translated this message for its Spanish-speaking employees, but the translator goofed. The translation said, in effect, that if the workers held a strike, the bakery would “exercise our right to hire legal replacement workers.”

The bakery won the election by a vote of 20-16. But the federal government set the result aside and ordered a “do-over.” Why? Because the poor translation could have been understood by the Spanish workers as an improper threat concerning their immigration status. [Read more…]

English-only rules can be illegal discrimination

Can employees be required to be fluent in English? The answer is yes … but only if speaking English is truly necessary for them to do their jobs safely and effectively. Otherwise, a company that has an English-only policy could get into legal trouble.

That’s what happened to a plastics manufacturer in Wisconsin that laid off 22 workers who lacked English language skills. The workers – most of whom were Hmong and some of whom were Latino – had apparently received good annual evaluations and didn’t need to be able to speak, read or write English to do their jobs.

The company claimed it targeted these workers for layoffs due to their “overall comparative skills, behaviors and job performance over time.” [Read more…]

Company that ‘forgave’ worker doesn’t have to do it again

Even though a company let an employee who engaged in hostile and abusive behavior “slide” and didn’t punish him, it can still fire him if he does it again, says a federal appeals court.

The case involved a sewer worker in North Las Vegas who had a long history of threatening and abusive behavior. The worker requested an accommodation for a hearing disability. A short time later, he was placed on leave after an incident where he swore at a co-worker. After an investigation of the incident, he was fired.

The worker sued, claiming he was discriminated against because of his disability. He said the city’s investigation of the swearing incident was just a pretext for discrimination, because he had engaged in similar misbehavior many times in the past and had gotten away with it. [Read more…]

Transgender discrimination is illegal, says U.S. Justice Department

A transgender person is someone who was born a certain sex but identifies with and lives as the opposite sex. The U.S. Department of Justice recently took the position that job discrimination against transgender people is illegal.

Specifically, the government says discrimination against transgender people amounts to “sex discrimination,” which is prohibited by federal law.

The decision means that the Department’s Civil Rights Division will be able to sue state and local public employers for discrimination on behalf of transgender individuals. [Read more…]

Companies can’t limit e-mail to ‘business purposes only’

A company that gives its employees access to its e-mail system can’t limit their use of the system strictly to “business purposes only.” That’s the word from the National Labor Relations Board.

The Board’s decision applies to both unionized and non-unionized workplaces.

However, the ruling is fairly limited, and it doesn’t mean that employees now have an unrestricted right to use company e-mail for humorous banter or idle chit-chat.

The issue arises because federal law allows workers to communicate with each other to address legitimate workplace concerns and grievances. Thus, a company can’t stop employees from using workplace e-mail to address these issues. [Read more…]

Immigration reform raises questions for many employers and workers

President Obama’s recent executive actions on immigration have opened the doors to potentially millions of workers, at the same time as they have made things much more legally complicated for employers. Both sides may now need legal help understanding how these actions affect their rights and responsibilities.

In particular, employers need to be very careful because there are a lot of uncertainties about how to legally treat workers who may be affected by the changes.

First, here’s some quick background: Back in 2012, President Obama put in place a program known as “Deferred Action for Childhood Arrivals,” or DACA. This program allowed certain young, undocumented immigrants to receive temporary permission to stay and work in America. [Read more…]

20% of homeowners don’t refinance when they should

About 20% of U.S. homeowners fail to refinance their mortgage when interest rates drop enough to make it worthwhile, according to the National Bureau of Economic Research.

This is a huge mistake. The median total of lost savings for these families is currently about $11,500 in present-value terms, the Bureau found

What is a ‘turnkey’ home?

About one out of every 150 real estate listings now uses the word “turnkey” to describe a home. But what does the word mean?

Unfortunately, there’s no clear answer. In many cases, a “turnkey” property means that the house comes with everything in it – furniture, rugs, art, window treatments, even the dishes and silverware. This type of listing is most popular with houses in resort areas that are being sold as vacation properties, since the buyer may already have a primary home and not want to bother having to outfit a second one.

But some sellers use the word “turnkey” simply to mean that the property has recently been renovated and doesn’t require any major repairs. So be sure to clarify what the seller has in mind when you see this term in a listing.

Hot now: Solar panels, in-law apartments

The biggest trends in new homes right now are built-in solar panels and separate apartments for aging relatives.

It typically costs $10,000 to $20,000 to retrofit an existing house with solar panels, but builders are increasingly putting them into new homes. Buyers can then choose to purchase the system or lease electricity from the builder.

Buying the system costs more upfront, and the full cost might not be reflected in a mortgage appraisal. But doing so can save money in the long run, especially since homeowners who generate more power than they need can often sell it to an electric company for a credit. [Read more…]

Banks in battle over condo fees, homeowners association dues

Did you know that 63 million Americans now live in condominiums and communities subject to a homeowners association? That’s up from just 10 million as recently as 1980.

The surge in community living is creating thorny legal issues when homeowners default on both their mortgage and their community dues, fees and assessments. Specifically, who can foreclose on the property, and who gets the money first, the bank or the community association?

The answer depends on the state, and often leads to conflicts between state laws, federal regulations, and condo documents.

About half the states have laws that say that community associations have priority over a mortgage lender, so if the property is sold, the condo or homeowners association gets paid first. But these laws vary widely. [Read more…]

Veterans can save on mortgages with a VA home loan

Active and retired service members can often get a great deal on a mortgage with a loan guaranteed by the Department of Veterans Affairs.

The VA doesn’t make loans, but it guarantees them for lenders, and in return lenders offer better terms on the loans. Not all lenders offer VA-backed loans, so it’s worth looking around for one that does.

The biggest advantages for borrowers are (1) no down payment in most cases, (2) no private mortgage insurance, and (3) frequently, lower rates.

Loans without a down payment are available in most of the country for loan amounts up to $417,000. In certain high-cost areas, the limit can go up to $625,500 (or even more in a few places). [Read more…]

How lenders have tightened standards in the past decade

Percentage of new mortgages by credit score (rounded):

2004                2014

780+                11%                 30%

700-779           43%                 44%

640-699           26%                 24%

620-639           7%                 2%

Below 620       13%                 0%


Home buyers get more help

A number of recent changes in the law and in the way that lenders do business are making it easier for people to buy a home and get a mortgage. Taken together, these changes suggest that things are moving back in a direction favorable to purchasers – after a decade in which laws and lending policies have repeatedly tightened things up.

This is a big shift. According to the Urban Institute, a Washington, D.C. think tank, some 1.2 million additional home loans would be made each year if lending rules and practices returned to their historical norms. [Read more…]

Elder mediation can reduce family strife

When a parent gets older and begins to need additional care, it can create a lot of stress within a family. Sometimes, it can create conflicts and misunderstandings between family members as well.

For example, siblings might argue over what’s best for an aging parent. Or if one family member is doing the bulk of the care, it can lead to resentment within the family, especially if the person providing the care is also receiving compensation for the work.

One way to deal with these issues is with an elder mediator. A mediator doesn’t make any decisions and doesn’t take sides. Instead, the mediator listens to the issues, keeps the family focused on shared goals, encourages consideration of all the options, and helps clear up misunderstandings and address hurt feelings. Through this process, a family can often come up with new answers to problems or new ways of resolving conflicts. [Read more…]

New rules for reverse mortgages

The federal government has tightened the rules for reverse mortgages, making it harder for some seniors to get these types of mortgages and reducing the amount of a home’s value that can be tapped.

Reverse mortgages allow elders who are house-rich but cash-poor to use their housing equity. Homeowners who are at least 62 years old can obtain a loan that doesn’t have to be repaid until the homeowner moves, sells, or dies. The homeowner receives a sum of money from the lender, usually a bank, based largely on the value of the house, the borrower’s age, and current interest rates. [Read more…]

Seniors who are no longer ‘independent’ can’t be discriminated against

Can an apartment complex require elderly residents to prove that they can live independently? How about a retirement community that caters to both independent and assisted-living residents – can it designate certain apartments or activities as only for people who are independent?

The answer might be more complicated than you think.

Two federal laws – the Fair Housing Act and the Americans With Disabilities Act – protect people with disabilities against discrimination. Landlords who try to limit areas or activities to people who are independent might run afoul of these laws. [Read more…]

Nursing home residents should prepare financially in case their spouse dies first

Seniors who are relying on Medicaid to help pay for expensive nursing home care need to plan carefully for the possibility that their spouse will pass away before they do.

Unlike Medicare, not all seniors are eligible for Medicaid. Medicaid is designed for people with limited income and assets, and to be eligible, you must meet strict financial guidelines. Many people have to spend down their assets to almost nothing and/or exhaust their long-term care insurance before they become eligible.

Of course, this is a problem if a senior is married and his or her spouse does not need nursing home care. It would mean that the spouse would have to be reduced to living in poverty before the senior could be eligible for benefits. [Read more…]

Tax filing reminder

July 31 is the deadline for filing 2015 retirement or employee benefit returns (5500 series) for plans on a calendar year.

Refocus your business

Are problems beginning to surface in your business? Have profits been dwindling? Are customers complaining with greater frequency? Are competitors encroaching on your market share? These are warning signs that you’re headed in the wrong direction – and you don’t want to ignore them until it’s too late. Here are suggestions for turning things around.

  • Focus on the money-makers. Perhaps your business has developed products your customers aren’t willing to buy. If so, it may make sense to redirect your company’s available resources. Does that mean you should never create new product lines or expand into new markets? No. But new products must eventually improve the bottom line. If they don’t make money within a reasonable time, refocus.
  • Establish (or reestablish) your brand. Identify what you do best; then tell everyone. Your goal is to educate customers, vendors, and employees on the reasons why your product or service is better than the competition. Be specific. Of course, to remain credible you must back up your claims, so be realistic as well. Win trust by following through.
  • Track results. Once you’re refocused on the money-making segments of your business, keep a close eye on the numbers. Know whether customer complaints are down, cash flow is improving, back orders are declining, and market share is holding steady or increasing. If profits aren’t showing an upward trend, take another look – then adjust and remeasure.

Maximize tax benefits of carryforwards and carrybacks

Although the tax code contains some exceptions, income is generally taxable in the tax year received and expenses are claimed as deductions in the year paid. But “carryforwards” and “carrybacks” have special rules. In this case, certain losses and deductions can be carried forward to offset income in future years or carried back to offset income in prior years, providing tax benefits.

  • Capital losses. After you net annual capital gains and capital losses, you can use any excess loss to offset up to $3,000 of ordinary income. Remaining losses can be carried over to offset gains in future years. The carryforward continues until the excess loss is exhausted.
  • Charitable deductions. Your annual charitable deductions are limited by a “ceiling” or maximum amount, as measured by a percentage. For example, the general rule is that your itemized deduction for most charitable donations for a year can’t exceed 50% of your adjusted gross income (AGI). Gifts of appreciated property are limited to 30% of your AGI (20% in some cases) in the tax year in which the donations are made. When you contribute more than these limits in a year, you can deduct the excess on future tax returns. The carryover period for charitable deductions is five years.
  • Home office deduction. If you qualify for a home office deduction and you calculate your deduction using the regular method, your benefit for the current year can’t exceed the gross income from your business minus business expenses (other than home office expenses). Any excess is carried forward to the next year. Caution: No carryforward is available when you choose the “simplified” method to compute your home office deduction.
  • Net operating losses (NOLs). Business NOLs can be carried back two years and forward 20 years. Tip: As an alternative, you may opt to forego the carryback and instead carry the entire NOL forward.

Tax planning is essential for second marriages

Wedding bells bring rejoicing – and financial changes. If you’re marrying for the second time, the changes might seem overwhelming. On the surface, tax and financial planning for a second marriage is similar to that of a first marriage.

For example, no matter what month you hold the ceremony, the IRS will consider you married for the full year. That means employer-provided fringe benefits and taxes withheld from your paychecks could require adjustment. Depending on how much each of you earns and your past financial history, you’ll have to decide what filing status will be most beneficial, and how best to take advantage of tax breaks that may become available. [Read more…]

Millions qualify for exemption

According to the Brookings Institution, an estimated 20 million taxpayers will qualify for an exemption from the Affordable Care Act’s penalty for failing to have insurance. It’s not known how many of those who qualify for the exemption will actually claim it. To check the available penalty exemptions, visit the IRS website at www.irs.gov.

Tax audits cut by budget issues

The IRS reports that its enforcement budget has been cut by $254 million, a 5% reduction from the previous year. As a result, the Agency expects to cut the number of individual and business audits it conducts. In 2014 the IRS audited 0.86% of individual taxpayers and 26% of large corporations. Though audit statistics show a decline in examinations, the IRS contacts many more taxpayers with questions about their returns. Once statistics include these taxpayer contacts, the 2014 return examination rate is closer to 4% or one in every 25 returns filed.

Preserve tax breaks with MAGI management

How close to the edge are you when it comes to tax phase-outs? As you begin your midyear tax planning, consider the effects of these benefit-limiting provisions. Knowing how close you are to the “edge” can help preserve tax breaks for 2015.

Many phase-outs are based on modified adjusted gross income, or MAGI. MAGI is the adjusted gross income shown on your tax return as “modified” by adding back certain deductions. The “add-backs” vary with specific phase-outs. That means you might have to choose between conflicting opportunities. For instance, if you have a child in college this semester, the American Opportunity Credit and the Lifetime Learning Credit may be on your mind. Both benefits are education-related, yet the qualifying rules differ – including the MAGI threshold. [Read more…]

Don’t overlook FBAR filing requirement

If you hold foreign bank or financial accounts and the total value of your account exceeds $10,000 at any time during the calendar year, you may be required to file a Treasury Department report known as the FBAR. It’s easy to overlook this requirement because it’s separate from your federal income tax filing, with a different deadline and strict rules.

FBAR refers to “Form 114, Report of Foreign Bank and Financial Accounts.” Your 2014 Form 114 must be filed electronically with the Treasury Department no later than June 30, 2015. No filing extension is available. Contact us if you need details or filing assistance.

Reminder: Second estimated tax payment due June 15

June 15, 2015, is the due date for making your second installment of 2015 individual estimated tax. Your check to the United States Treasury should be accompanied by Form 1040-ES. June 15 is also the due date for calendar-year corporations to make their second quarter 2015 estimated tax payment.