Legal Articles

OSHA delaying employer filing deadline

There’s good news for employers required to electronically file injury and illness data with OSHA: You had until Dec. 1, 2017, to comply.

The rule became effective Jan. 1, 2017, with an initial requirement that employers electronically file the information by July 1, 2017. However, given the agency’s inability as of May 2017 to accept electronic submissions of injury and illness logs, OSHA has now formally proposed extending the filing deadline until Dec. 1. It also appears that OSHA is reconsidering the entire rule, which it may even modify or revoke prior to the proposed Dec. 1 filing date.

Disclosing sponsorships now easier on Instagram

Whether you accept or give sponsorships tied to Instagram posts, Instagram is making an effort to make the disclosure process easier.

The social media network is now testing and considering for widespread use allowing users to tag a brand within posts. If the brand confirms the relationship, the post will then be marked as an ad with a “paid partnership with [brand name]” tag at the top.

The Federal Trade Commission recently called out Instagram in particular in a flurry of letters reiterating that influencers and marketers must clearly disclose their relationships to comply with the agency’s Endorsement Guides. The agency noted that endorsements need to be disclosed near the top of posts so that consumers who view posts in their streams or on mobile devices will see the disclosure without having to click “more.” [Read more…]

What to avoid when signing an office lease

Unforeseen costs can crush a business that opts to sign an office lease without legal counsel. From initial construction costs to later capital improvements, the list of potential hidden costs is long and adds up quickly.

To avoid the possibility of paying several large bills down the line, ask your lawyer to help you negotiate a fair lease up front that covers the following, as necessary: a landlord-performed buildout, a tenant-performed buildout, operating expenses and end-of-lease condition.

Landlord-performed buildout

If the landlord is performing demolition and/or construction at the space you are planning to lease, crucial details need to be ironed out in advance and put in writing, including the nature and scope of the construction, a procedure for preparing and approving plans and specifications, the construction schedule and the approval of contractors. [Read more…]

Must websites accommodate blind users?

Just because the Department of Justice does not yet have new website accessibility rules for places of public accommodation doesn’t mean businesses hosting websites aren’t already at risk.

Blind or visually impaired plaintiffs have been filing federal lawsuits against companies over the accessibility of their websites, although they’re meeting with different results.

A federal judge in Florida recently handed down a verdict in the case of Gil v. Winn-Dixie Stores, Inc., finding that Winn-Dixie had violated Title III of the Americans with Disabilities Act by having a website that could not be used by the blind plaintiff. [Read more…]

Beware pitfalls of cloud contracts

Think it’s just your business’ data being stored in the cloud these days? Think again. Some (or all) of the provisions of your contract with your cloud provider also may be “floating,” and can thus be changed at any time, often without notice to you.

How is this possible? Part of the blame rests with the modern-day trend of simplified contracts that include some brief general terms and conditions hyperlinked to online terms that can change at any time.

Typically, these contracts are presented on an as-is basis, and built-in protections, including service levels, generally provide only basic protection. Businesses then have little to no ability to terminate the agreement, even if key terms — including support obligations, service levels, service descriptions and performance standards — change to their disadvantage. Such key terms can change at any time, generally without notice. [Read more…]

Employer couldn’t force religious worker to use hand scanner

Title VII of the federal Civil Rights Act requires employers to make “reasonable accommodations” for their workers’ religious beliefs. Employers who disregard this, even when the religious beliefs seem bizarre, run the risk of liability, as a mining company in West Virginia recently learned.

In that case, a coal miner refused to use a new biometric scanner that the employer had installed as an identification device. The miner apparently feared that use of the scanner would give him the “Mark of the Beast,” which according to the Book of Revelations would then brand him a follower of the Antichrist. He requested an alternative identification measure as a form of religious accommodation.

The employer denied the request. The employee resigned and sued for religious discrimination under Title VII. A jury found in his favor and a federal appeals court affirmed, rejecting the employer’s argument that the scanner neither left any kind of mark nor legitimately conflicted with the employee’s religious beliefs. [Read more…]

Supervisor can be sued individually for violating the FMLA

The Family and Medical Leave Act entitles employees who’ve been employed for at least 12 months by a company with at least 50 or more employees within a 75-mile radius to take up to three months of unpaid leave during any 12-month period in order to deal with a medical problem, care for a new child or care for a close relative with a health condition. Employers who fail to abide by the FMLA’s requirements or who retaliate against a worker for taking FMLA leave risk serious legal liability.

Further, according to a recent case out of Massachusetts any supervisor or manager who violates the FMLA can be sued individually too.

In that case, employee Elliott Eichenholz was on disability leave from security services giant Brinks, Inc., when his supervisor Gordon Campbell issued him a performance improvement plan (“PIP”) letter containing a bunch of demands he’d have to meet in the next 90 days to keep his job. [Read more…]

Illinois case highlights importance of taking harassment complaints seriously

A recent case from Illinois demonstrates just how critical it is for employers to conduct a legitimate investigation of all complaints of sexual harassment in the workplace.

In that case, Maria Gracia, a female assembly line supervisor at electronics manufacturing services provider Sigma Tron, complained to human resources that her manager had been sending her graphic email photos, calling her late at night, repeatedly asking her on dates and sending her unwanted text messages. She repeatedly turned him down, but one day, after receiving yet another “No,” the manager allegedly suspended her for two days, claiming it was for excessive tardiness.

The HR rep brought Gracia to meet with a company vice president, who, instead of ordering a thorough investigation of the complaints, invited the alleged harasser and retaliator into the meeting to help “sort things out.” After hearing both “sides of the story,” the HR rep and the VP told Gracia to shake hands with the manager and “work together” with him to “solve their disputes.” [Read more…]

Non-disabled worker can bring action under ADA

An employer can land in hot water under the Americans with Disabilities Act (ADA) if it discriminates against a worker based on that worker’s disability. In other words, an employee can’t be fired, denied a promotion or treated negatively because of his or her disability. But did you know that an employer also violates the ADA by mistreating a non-disabled employee whom it thinks is disabled?

Take a recent case out of Virginia involving Joseph Cash, who worked as a service director for a car dealership in the town of Lexington.  He had worked for the dealership for three years when he took another job in 2013. He returned in 2015, but soon after had to take time off to deal with a bleeding ulcer and chronic anemia. While he was out, he and his wife stayed in touch with a supervisor. When Cash got back, he presented a doctor’s note requesting that he be able to work at the dealer’s location in Roanoke, which was closer to his home, or to work half days until he was better.

In response, his supervisor immediately replaced him at the Lexington location and cut his salary by a third. The supervisor also complained about Cash’s absence several years earlier for hip replacement surgery — an absence that had been covered by the Family and Medical Leave Act. [Read more…]

Mishandling terminations can lead to headaches, so consider the human factor

If you’re an employer and you’re reading this, chances are you’ve had to fire an employee for one reason or another. It could have been for cause or for economic reasons. Maybe the worker was simply not a good fit. In most situations, the employee probably left peacefully, although perhaps a bit angry or hurt.

But some workers don’t leave quietly and instead come back at their employers with lawsuits, even if there were legally valid reasons for the firing. In those cases, it’s often how the employer fired the worker and not the job loss itself that triggered the employee’s response. However, a little bit of smart strategy can defuse some of the tension in an emotionally fraught situation and potentially head off a lawsuit that could be costly, distracting and stressful, even if you win.

So how do you keep a legally justifiable termination from backfiring? By handling the termination in a manner that doesn’t come across as callous and disrespectful. [Read more…]

Tax checklist for business startups

Starting your own business can be equal parts thrilling and intimidating. Complying with regulations and tax requirements definitely falls into the latter category. But, with some professional help, it doesn’t have to be that way. You can get started with this checklist of things you’ll need to consider.

  • Are you a hobby or a business? This may seem basic to some people, but the first thing you’ll have to consider when starting out is whether you really are operating a business, or pursuing a hobby. A hobby can look like a business, but essentially it’s something you do for its own sake that may or may not turn a profit. A true business is generally run for the purpose of making money and has a reasonable expectation of turning a profit. The benefit of operating as a business is that you have more tax tools available to you, such as being able to deduct your losses.
  • Pick your business structure. If you operate as a business, you’ll have to choose whether it will be taxed as a sole proprietorship, partnership, S corporation or C corporation. All entities except C corporations “pass through” their business income onto your personal tax return. The decision gets more complicated if you legally organize your business as a limited liability corporation (LLC). In this case you will need to choose your tax status as either a partnership or an S corporation. Each tax structure has its benefits and downsides – it’s best to discuss what is best for you. [Read more…]

Answers to commonly asked tax questions

With all of the headlines about the changes to tax law, you probably have lots of questions. Here are answers to some of the most common questions taxpayers have this year.

Q. I’m hearing about a lot of changes to 2018 taxes. What should I do?

A. You’re right, there are a lot of changes in 2018 due to the passage of the Tax Cuts and Jobs Act (TCJA), including to the income tax brackets. The simple answer to the question, “What should I do?” is to not make any major changes until you finish filing your 2017 taxes. Once you understand your 2017 tax obligation, you are in a better position to plan for 2018.

However, there are a few things you can start thinking about now. Depending on where you fall in the new income tax brackets, you may want to consider ways to lower your taxable income. This could include increasing your contributions to 401(k) retirement accounts or health savings accounts (HSAs). You’ll also want to make sure your employer has adjusted your federal tax withholding so that you don’t have to wait to receive a large refund (or tax bill) next year. You can review the IRS withholding calculator using your latest pay stub data to make sure the changes are accurate. [Read more…]

Alert: Expired home and education tax breaks revived

Congress passed a federal budget bill in early February that revived dozens of expired tax breaks for the 2017 tax year. They include a deduction for education expenses as well as several tax breaks for homeowners.

If you have not yet filed your 2017 tax return, please be aware these late changes are retroactive to the beginning of 2017. Check out this list of the most useful tax breaks to see if they apply to your situation:

Tuition and fees deduction. If you paid qualified tuition and related higher education expenses, you may be able to deduct as much as $4,000 of those costs. This can be done on a regular return (without itemizing). The deduction is capped at $4,000 for single filers with adjusted gross income (AGI) of $65,000 or less ($130,000 joint) and at $2,000 for single filers with AGI of $80,000 or less ($160,000 joint). [Read more…]

Tax filing reminders

March 1 – Farmers and fishermen who did not make 2017 estimated tax payments must file 2017 tax returns and pay taxes in full.

March 2 – Automatic extension deadline for employers and health care providers to provide Forms 1095-B and 1095-C to individuals.

March 15

  • 2017 calendar-year S corporation income tax returns are due.
  • 2017 partnership returns are due.
  • Deadline for calendar-year corporations to elect S corporation status for 2018.

Law revoking beneficiary status didn’t apply retroactively

A new decision from a federal appeals court should give every divorced person incentive to look over his or her insurance policies and other financial documents to make sure beneficiaries have been changed. This holds true even in states with laws that automatically revoke a now-ex-spouse’s beneficiary status upon divorce.

The federal appeals court case concerned Minnesota couple Mark Sveen and Kay Melin, who got married in 1997. Mark had two children from a prior marriage and these kids were the primary beneficiaries on a life insurance policy that he had in place. But once he got married, Mark made Kay his primary beneficiary, with his kids as beneficiaries of a different policy.

The couple divorced after 10 years. Mark never removed Kay as the beneficiary after the divorce, although Kay claims that Mark agreed to keep her as the beneficiary in exchange for giving him a better property settlement. [Read more…]

Spat between parents may constitute ‘change in circumstances’

It’s never easy for a kid to be shuttled back and forth between two divorced parents who cannot communicate constructively. But it can get even worse for a child as he or she gets older and becomes more aware of the hostility between his or her parents. If a recent decision out of North Carolina is any indication, this growing awareness of the parents’ hatred toward one another may even be grounds for modifying a custody order.

In that case, a couple divorced in 2012 and a judge awarded the father primary physical care and custody of the couple’s young daughter “Reagan.” The judge apparently made this decision based on the couple’s “utter inability” to work together for their daughter’s benefit as well as the mother’s repeated, unsubstantiated allegations that the father was abusing Reagan.

Two years later the mother asked the court to modify the custody order, claiming that the father’s new girlfriend was acting as Reagan’s primary caregiver. A trial judge granted the motion, citing “changed circumstances” and giving the mother primary custody.  Specifically, the judge found that the parents still couldn’t communicate effectively and that Reagan, who was getting older and becoming more aware of the situation, was experiencing increasingly higher anxiety as a result. He also noted that the father and his girlfriend were keeping Reagan away from other family members and that the mother was no longer making false abuse allegations. [Read more…]

Husband held in contempt for non-payment despite waiver

A husband could be cited for contempt of court for failing to make agreed-upon payments to his ex-wife even though she had waived the right to “spousal support” in their divorce decree, the Virginia Court of Appeals recently decided.

In that case, as part of the property settlement the husband agreed to make a $40,000 lump-sum payment, to be satisfied in 16 equal monthly installments.

The divorce agreement contained a section entitled “alimony” in which both parties stated that they were waiving any right to receive alimony or “spousal support” payments in the future. The husband also agreed to pay for his wife’s health insurance for the next year and a half. The final decree created some confusion by stating that the amount of “periodic support” was expressed in fixed sums (presumably meaning the $40,000 lump sum) and set out a schedule for payment of “periodic spousal support” (presumably meaning the 16 installments). [Read more…]

Adult child’s ‘failure to launch’ doesn’t justify child support

In most states, the obligation to pay child support ends when the child turns 18. In some states it may end when the child graduates from high school, if that comes first. Minor children also generally can become “emancipated” through a court proceeding if they can support themselves, if they join the military, or if they get married. At that point, the obligation to pay child support ends. But the obligation to pay support can continue past age 18 if the money is used to pay for the adult child’s education or if the adult child is disabled.

What about an adult child who’s still living with one of the parents and just hasn’t figured out a way to support himself? Is the other parent required to pay support in that case?

A recent decision from an appeals court in New Jersey indicates that the answer is “No.” [Read more…]

Will you get credit in property division for footing household bills during divorce?

An issue that frequently arises when a marriage breaks up is who pays the household bills while the divorce is pending. A lot of times the spouse who paid the bills during the marriage will continue to pay utility bills and homeowner’s association or condo fees while making mortgage payments on the marital home. If you’re the one making those payments, you’re probably wondering whether a divorce judge will give you some sort of credit for it when dividing up the marital property. In other words, will you get a bigger share of the remaining property in consideration for the bills you’ve paid or be saddled with a smaller share of marital debt?

The answer is that it depends on the situation and the laws where you live.

Take, for example, a recent case from North Carolina, where it all came down to the concept of “active” versus “passive” decreases to marital debt. [Read more…]

Taxes and virtual currencies: What you need to know

Virtual currencies are all the rage lately. Here are some tax consequences you must know if you decide to dip your toe into that world.

The IRS is paying close attention
The first thing to know is that the IRS is scrutinizing virtual currency transactions, so if you live in the U.S. you’ll have to report your transactions in Bitcoins and the like to the IRS. Despite some early misconceptions, virtual currency transactions can be traced back to their owners by governments and other cyber sleuths.

If you decide to use or hold virtual currencies, carefully report and pay tax on your transactions. Act as if you are going to be audited, because if you don’t, you just might be! [Read more…]

Tips for when your employees are family members

Working with family can be a pleasure. It can also be a pain, especially if you have to terminate a family member’s employment. Here are tips to help you ease the strain of mixing your family and employee relationships.

Hire for the right reasons. Make your hiring and firing decisions based on the skill sets needed to keep your business operating effectively. Hiring your son because he’s struggling to find a job is not a good business reason for bringing staff on board.

Set clear expectations. Communicate the job’s performance requirements to your family member right from the start. Clearly define company policies for promotion, compensation and termination. Make it plain that unethical conduct will not be tolerated. [Read more…]

New 2018 capital expense rules

There are many provisions in the tax reform bill passed in late 2017 designed to benefit small business owners. There are also a variety of new tax tools affecting how small businesses account for deducting the cost of capital purchases under the new tax law. Here’s what you need to know:

Tool #1: Section 179 deduction
The new law increases the amount of business property purchases that you can expense each year under Section 179 to $1 million (from $500,000 previously). Normally, spending on business property (machines, computers, vehicles, software, office equipment, etc.) is capitalized and depreciated so that the tax benefit is spread out slowly over several years. Section 179 allows you to get the tax break immediately in the year the property is placed into service.


  • There is an eligibility phaseout for Section 179 that ensures it’s only used by small businesses, but that was also raised to $2.5 million (from $2 million) by the new law. If you spend more than $2.5 million on business property in total during the year, your ability to use the $1 million Section 179 deduction is reduced dollar-for-dollar above that amount. [Read more…]

Tax filing reminders

February 28 – Payers must file most other Forms 1099 (except certain Forms 1099-MISC due Jan. 31) with the IRS. (April 2 if filing electronically.)

March 1 – Farmers and fishermen who did not make 2017 estimated tax payments must file 2017 tax returns and pay taxes in full.

March 2 – Automatic extension deadline for employers and health care providers to provide Forms 1095-B and 1095-C to individuals. [Read more…]

New Pass-Through Entity Rules

One of the most important – and complicated – changes in the new tax reform act is to tax rules affecting small businesses that are treated as “pass-through entities.”

The good news is that if you own one of these businesses you may get as much as a 20 percent reduction to the taxation of business net income under the new rules. However, calculating the actual deduction can become very complex. It depends upon several factors, including your level of income, your profession, the amount your business spends on wages and property acquired during the year.

Tax reform background

Most small businesses in the U.S. use pass-through business structures, which pass their profits on to their individual owners. Owners pay tax on those profits at their individual tax rates, in conjunction with other income. The new tax rates range from 10 percent to 37 percent in the 2018 tax year. Pass-through business structures include S corporations, partnerships and LLCs. Sole proprietorships handle business income in a similar way using Form 1040 Schedule C and are also covered by the new rules. [Read more…]

How to sell your rented investment property

Are you ready to sell that investment property, but unsure what to do because it’s currently being rented? You have options, but first you need to understand the legal restrictions on selling a property while a tenant is renting it.

Most states do not see selling the property as a valid enough reason to terminate a lease agreement early. So if there is still a set term on the lease, you may need to wait the tenant out before selling. Otherwise you can offer to pay him or her to vacate early.

For tenants on a month-to-month lease, be sure not to violate local landlord-tenant statutes that set forth the proper notice requirements for the tenant to vacate the property. These normally range from 30 to 60 days. [Read more…]

Why more millennials are opting for adjustable-rate mortgages

Cash-strapped millennials looking to keep interest-rate costs down are opting for adjustable-rate mortgages (ARMs) instead of the more traditionally popular fixed-rate mortgages.

ARMs are particularly attractive for young homeowners who do not plan to retain property long term. Experts say the best way to select an ARM is to match the fixed period to the time the buyer plans to be in the home. For example, millennials planning to move where their jobs take them within a few years might find a 3/1 ARM provides a rate advantage in the short term.

Know a millennial thinking of trying an ARM? Here’s what they should consider: [Read more…]

When can a tenant legally withhold rent?

Although it’s never ideal, sometimes it may become necessary to withhold rent until problems with a rental unit are corrected.

Tenants need to be very careful when doing so. A tenant must provide notice and be sure to follow state or local laws. Not following the rules can lead to an eviction for failing to pay rent.

First, always give the landlord a reasonable opportunity to fix any problems. But if you have repairs that need to be made and your landlord refuses to make them, or won’t even return your call, eventually withholding rent may be an option. Unless your lease specifically allows you to deduct or withhold rent for particular repairs, maintenance or other issues, you need to clear it with your landlord, in writing, to make sure you are protected from a breach of contract claim. If your landlord refuses to cooperate, an experienced landlord-tenant attorney can help you avoid having to pay even more for an eviction defense attorney down the road. [Read more…]

Precautions to take before starting a home-improvement project

You’ve selected the right contractor, picked out the materials and set aside the necessary budget. It might seem like you’re ready to embark on that home-improvement project. But have you contacted your insurance agent?

Experts recommend that homeowners get in touch with their insurance agent before a home-improvement project to make sure they have sufficient coverage, and after the project is done to see if policy limits need to be increased to provide for enough insurance to rebuild the home. Some projects, such as replacing a roof or installing impact-resistant windows, may even qualify you for an insurance discount.

If anything goes wrong during the project that results in the need to file a claim, you’ll be glad you handled the following in advance, as well: [Read more…]

Weigh the risks in contractor disputes

Construction projects can get tense, and when a dispute arises mid-project it takes some finesse to maintain working relationships or at least get the project done.

It’s always best to bring up any concerns right away and see if by talking it out you and the contractor can find resolution. Often contractors will be willing to redo work, or make changes to completed work, for a discounted price.

That can be the most cost effective way to resolve an issue, and can also help keep your project close to the original timeline, as the contractor will want to maintain the working relationship. [Read more…]

U.S. Supreme Court rules on regulatory takings

Property owners forced to hash out regulatory takings in court may lose out more often thanks to a new test used to determine whether two adjacent properties with a single owner could be considered a larger parcel.

The U.S. Supreme Court’s decision in Murr v. Wisconsin found that the properties in question were a single parcel, and because the owners were not deprived of all economically viable uses of their property they could not establish a compensable regulatory taking.

The case addressed land use regulations that merged adjacent parcels (one developed, one undeveloped) into one for environmental reasons, despite the fact they were separately acquired, owned and taxed. The regulations prevented the development or sale of the second, undeveloped parcel. [Read more…]

IRS now allows private debt collectors to dun taxpayers

In a move that could be confusing to seniors who are vulnerable to scams, the IRS is using private debt collection agencies to collect past-due taxes. The new program began in April 2017.

Pursuant to a law Congress passed in December 2015, the IRS may now contract with private debt collectors to collect certain debts. The private collection agencies can work on accounts where the taxpayer owes money but the IRS is no longer actively working on the account, perhaps because it is older or because the IRS does not have the resources to continue pursuing it.

Historically, scammers have posed as the IRS to target seniors and other vulnerable adults to retrieve identifying information or payment. Up until now, tax professionals have been able to reassure clients that the IRS would never harass consumers over the phone. However, under this new rule private debt collectors may contact taxpayers by phone, which may make it more difficult to determine whether a scammer is targeting the taxpayer.  [Read more…]

Five things to know to reduce your tax on capital gains

Although it is often said that nothing is certain except death and taxes, the one tax you may be able to avoid or minimize the most through planning is the tax on capital gains. Here’s what you need to know to do such planning:

What is capital gain? Capital gain is the difference between the “basis” in property (usually real estate or stocks, but also including artwork and collectibles) and its selling price. The basis is usually the purchase price of the property. So, if you purchased a house for $250,000 and sold it for $450,000 you would have $200,000 of gain ($450,000 – $250,000 = $200,000). [Read more…]

Using a prepaid funeral contract to spend down assets for Medicaid

No one wants to think about his or her death, but a little preparation in the form of a prepaid funeral contract can be useful. In addition to helping your family after your passing, a prepaid funeral contract can be a good way to spend down assets in order to qualify for Medicaid.

A prepaid or pre-need contract allows you to purchase funeral goods and services before you die. The contract can be entered into with a funeral home or cemetery. Prepaid funeral contracts can include payments for embalming and restoration; a room for the funeral service; a casket, vault or grave liner; cremation; transportation; permits; a headstone; a death certificate; and an obituary, among other things.

One benefit of a prepaid funeral contract is that you are paying now for a service that may increase in price — possibly saving your family money. You are also saving your family from having to make arrangements after you die, which can be difficult and time-consuming. [Read more…]

Estate planning for a single person

If you are single, you may not think you need to plan your estate.  But single people have as much reason to plan as anyone else. Estate planning not only involves determining where your assets will go when you die, it also helps you plan for what will happen should you become incapacitated, perhaps as the result of a stroke, dementia, or injury. If you don’t make a plan, you will have no say in what happens to you or your assets.

Without a properly executed will in place when you die, your estate will be distributed according to state law. If you are single, most states provide that your estate will go to your children, parents, or other living relatives. If you have absolutely no living relatives, then your estate will go to the state. This may not be what you want to have happen to your assets. You may have charities, close friends, or particular relatives that you want to provide for after your death.

If you become incapacitated without any planning, a court will have to determine who will have the authority to handle your finances and make health care decisions for you. The court may not choose the person you would have chosen. In addition, going to court to set up a guardianship is time-consuming and expensive. [Read more…]

The best way to avoid an audit: Preparation

Getting audited by the IRS is no fun. Some taxpayers are selected for random audits every year, but the chances of that happening to you are very small. You are much more likely to fall under the IRS’s gaze if you make one of several common mistakes.

That means your best chance of avoiding an audit is by doing things right before you file your return this year. Here are some suggestions:

Don’t leave anything out. Missing or incomplete information on your return will trigger an audit letter automatically, since the IRS gets copies of the same tax forms (such as W-2s and 1099s) that you do. [Read more…]

Mileage rates for 2018

The IRS recently announced mileage rates to be used for travel in 2018. The standard business mileage rate increased by 1 cent to 54.5 cents per mile. The medical and moving mileage rates also increased by 1 cent, to 18 cents per mile. Charitable mileage rates remained unchanged at 14 cents per mile.

Remember to properly document your mileage to receive full credit for your miles driven.

Looking ahead: Tax reform in 2018

Congress has passed tax reform that will take effect in 2018, ushering in some of the most significant tax changes in three decades. Here are some major items in the new bill that impact individual taxpayers.

Reduces income tax brackets. The bill retains seven brackets, but at reduced rates, with the highest tax bracket dropping to 37 percent from 39.6 percent.

Double standard deductions. The standard deduction nearly doubles to $12,000 for single filers and $24,000 for married filing jointly. To help cover the cost, personal exemptions and most additional standard deductions are suspended.

[Read more…]

Tax filing reminders

January 16 – Due date for the fourth installment of 2017 individual estimated tax.

January 31 –

  • Due date for employers to furnish W-2 statements to employees, and to file Forms W-2 with the Social Security Administration (both paper and electronic forms).
  • Due date for payers to provide most Forms 1099-MISC with non-employee compensation in box 7 to recipients and to the IRS.
  • Employers must file 2017 federal unemployment tax returns and pay any tax due.
  • Due date for providers to send Forms 1095 to recipients and the IRS.

Revised: Tax Cuts and Jobs Act: What the Tax Reform Bill Means for You

Revised: 12/28/2017

Congress has passed a tax reform act that will take effect in 2018, ushering in some of the most significant tax changes in three decades. There are a lot of changes in the new act, which was signed into law on Dec. 22, 2017.

You can use this memo as a high-level overview of some of the most significant items in the new act. Because major tax reform like this happens so seldom, it may be worthwhile for you to schedule a tax-planning consultation early in the year to ensure you reap the most tax savings possible during 2018. [Read more…]

Tips for choosing your executor

Choosing your executor, who will administer your estate and carry out your final wishes, may be one of the most important decisions you make when preparing your will.

Before you name someone, get his approval and make sure he feels up to the task. An executor’s responsibilities including filing court papers to start probate and validate the will, inventorying the estate, notifying banks and government agencies, sorting out finances, maintaining all property until it’s distributed or sold, filing a final tax return, and distributing assets.

Depending on the size and nature of your estate, this work can seem like a complicated, daunting task. Recognize that serving as executor can be particularly complicated for someone who lives out of state. He or she will likely have to travel for probate appearances, and some states require a state resident to co-serve as executor or agent. [Read more…]

Pre-litigation claims can be effective in estate tax disputes

Pre-litigation is activity that occurs before a legal suit is filed. If you are involved in an estate transfer and your rights are unclear, pre-litigation may be an effective way to establish your position and head off a more costly legal conflict.

Pre-litigation claims are typically made in an effort to get the other party to back down or engage in negotiations. This process may be the first step in claiming a will or trust is invalid, challenging a premarital agreement, or charging that an executor is engaged in misconduct.

In a much-publicized conflict over the estate of former “Growing Pains” star Alan Thicke, for example, his sons filed a pre-litigation complaint to enforce their father’s trust, claiming that Thicke’s widow intended to challenge her prenuptial agreement. (Thicke’s widow denied such intent and a judge subsequently dismissed the sons’ claim.) [Read more…]

Documenting your rationale

In addition to telling your children why you plan to leave an unequal gift, consider providing a written explanation of your decision that can be attached to your trust or will. Such a letter communicates facts and feelings that are not otherwise included in estate planning documents and may deter an unhappy heir from contesting your will. Consult your attorney about any estate planning letters you intend to leave to ensure you don’t create any confusion in your plans.

Beneficiary designations
Talk to your estate planner and be sure you understand the implications of naming certain children as a beneficiary on a retirement account or life insurance policy. In such cases, those assets would pass to the named child directly and would be excluded from your estate, meaning those assets won’t get divvied up among your heirs.

Even if your child recognizes this was a mistake and wants to redistribute the funds, it can be a costly and difficult issue to fix. Regifting assets to their siblings could trigger gift taxes. Alternately, the child could disclaim part of the inheritance, but that is best done with legal counsel and a full understanding of potential implications. [Read more…]

Communicate with your kids before leaving unequal assets

When it comes to leaving money to the kids, some parents struggle to reconcile “equal” with “fair.” An equal inheritance treats each child the same, regardless of life situation or special circumstances. On the other hand, sometimes an unequal distribution can seem like the fairest thing to do, given a child’s age, financial wherewithal, or previous track record.

To avoid unpleasant surprises and contentious family squabbles, be transparent about your plans and talk with your children ahead of time. That helps children understand your point of view and gives them an opportunity to share concerns or life issues you may not be aware of.

Imagine, for example, that you intend to leave more to your daughter, the social worker, and less to your son, the small business owner.  Disclosing this plan could encourage your proud son to reveal that business is declining and the operation has far less value than you thought. [Read more…]

How to leave your home to the kids

Deciding when and how to relinquish the family home can be one of the most challenging issues seniors face. For many, a home is their most valuable asset and a cornerstone of the wealth they’d like to transfer to their family.

If you’re one of AARP’s estimated 87 percentage of older adults who wants to stay at home and “age in place,” you may be planning to stay put as long as possible with the goal of transferring your house to your heirs after you die.

Here is a review of the ways you can go about leaving your home to your children: [Read more…]

Proposed regulations curtailing valuation discounts withdrawn

The Treasury Department and the IRS have announced that proposed regulations that would have drastically limited valuation discounts for transfers of family businesses are being withdrawn.

The regulations would have curbed valuation discounts commonly used when family business owners transfer minority shares to other family members.

The withdrawal means that family business owners will still be able to transfer a portion of their business to their children while applying valuation discounts. Primarily, those discounts include adjustments for lack of control and lack of marketability. [Read more…]

Tax Cuts and Jobs Act: What the Tax Reform Bill Means for You

Congress has passed tax reform that will take effect in 2018, ushering in some of the most significant tax changes in three decades. There are a lot of changes in the new bill, which is expected to be signed into law soon.

You can use this memo as a high-level overview of some of the most significant items in the new bill. Because major tax reform like this happens so seldom, it may be worthwhile for you to schedule a tax-planning consultation early in the year to ensure you reap the most tax savings possible during 2018. [Read more…]

Court decision muddies the waters for ‘safe harbor’ for user-generated online posts

A recent decision from a federal appeals court in California will likely have broad implications on what screening procedures, if any, a service provider adopts for user-generated posts and material.

The case, which is called Mavrix Photographs LLC v. LiveJournal Inc., limits the availability of safe harbor protection for social media platforms and other sites that use moderators to review user-submitted posts, even when the website has processes in place for expeditiously removing materials identified in takedown notices under the federal Digital Millennium Copyright Act.

Safe harbor protection can shield you from liability for the copyright infringements of your site’s users if you establish effective notice-and-takedown procedures and promptly remove content when you’ve been notified it is infringing. [Read more…]

Is a patent enough? How to protect your intellectual property

You had a great idea and you started a business around it. Now, you need to protect that intellectual property.

First, check to be sure that your idea is original. Conduct patent and trademark searches early in the development of new products and processes to make sure there isn’t anyone else already protecting the same ideas or concepts.

If you do have an original, patentable idea, go ahead and file a patent application. Filing an initial patent application gives you time to develop or sell your idea, complete market research and/or raise money. [Read more…]

Traditional office vs. co-working space: Which is right for your business?

Collaborative work environments with shared spaces are an increasingly popular take on traditional office space, but can come with less than ideal leasing terms.

Most co-working spaces operate using an occupation license agreement that allows members to use the space for a particular purpose or set of purposes. But it is much easier for a landlord to revoke a licensee’s right of access to than it is to evict a tenant.

A commercial leasing agreement for traditional office space provides tenants more rights and a greater level of security. Such leases can be overly restrictive for startup operations planning to grow quickly, however. Those with smaller teams and budgetary constraints may benefit from the collaborative environment and reduced costs a shared space can provide. [Read more…]

Cybersecurity essentials for small to mid-size businesses

A strong cybersecurity program is designed to protect the confidentiality, integrity and availability of a business’s information systems. These systems can include any computer or networked electronic system used by a business, and certain sensitive business and consumer information.

Programs should be designed to perform three primary functions:

  • Identify and assess threats and risks;
  • Protect information systems and sensitive information from malicious use and unauthorized access; and
  • Detect, respond to and recover from cybersecurity “events” such as breaches.

[Read more…]