Courts expanding definition of ‘parent’ to recognize ‘de facto’ parenthood

Traditionally who was a parent was pretty clear-cut. If a child was yours biologically or if you adopted him or her, you were considered a parent. That would give you the right to seek custody and visitation if you and the other parent were no longer living in the same home.

But just as traditional notions of “family” have evolved in recent years, so have traditional notions of who a parent is. Two recent court decisions make this clear. Both decisions appear to recognize the idea of a “de facto” parent: a non-adoptive, non-biological caretaker who has earned parental status through the bond he or she has developed with a child and who deserves to be viewed on equal legal footing with the biological parent. And while both decisions involve same-sex couples, the reasoning behind them could extend to any non-adoptive, non-biological “parent.”

The first case is from Maryland and involved Michael Conover, a transgender man (a person who was born biologically female but identifies and lives as a male) who married a woman before undergoing gender transition. Before his transition, he and his wife, Brittany Conover, lived as a same-sex couple. [Read more…]

Filed Under: Articles, Family Law Articles

Realtors survey: First-time home-buying is down

In reviewing 35 years of survey data on home buyers and sellers, the National Association of Realtors (NAR) announced five notable real estate trends.

The organization’s survey, called Profile of Home Buyers and Sellers, dates back to 1981 and is the longest-running series of national housing data evaluating the demographics, preferences, motivations, plans and experiences of home buyers and sellers.

Here are the key takeaways over the past 3 ½ decades: [Read more…]

Filed Under: Articles, Real Estate Articles

Financing for energy improvement loans now easier to obtain

Residential properties encumbered with a Property Assessed Clean Energy (PACE) obligation are now eligible for FHA-insured mortgage financing.

The change applies both to new purchases and refinancing, under a guidance issued in September by the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA).

PACE is a popular program that provides an alternative way to finance energy improvements to properties, such as energy efficiency, water conservation and renewable energy upgrades. The financing is provided by private entities in connection with state and local governments. [Read more…]

Filed Under: Articles, Real Estate Articles

Clean-up not disclosed; Seller sued for fraud years later

A recent case highlights the importance of disclosing any environmental contamination and clean-up that took place on your property when you sell it, even if you sell it “as is.”

A New Jersey appeals court decided that a seller’s failure to disclose such information could expose him to liability for fraud many years after the sale.

In the case, the seller had owned the property since 1983 and defaulted on the mortgage in 1987. The seller’s mortgage lender took possession of the property and made plans to sell it. The lender had an environmental consultant take soil samples and learned that the property was contaminated with perchloroethylene (“PCE”). [Read more…]

Filed Under: Articles, Real Estate Articles

The surprising effect of Airbnb income on mortgage refinancing

Renting out your house when you’re out of town or offering up an extra room while your son or daughter is away at college sounds like a great way to make some extra cash. And services like Airbnb have made the process rather simple.

But it might not be quite so simple when you go to refinance your home. Recently, some big banks are raising an eyebrow because making money off your home can be construed as turning your residence into commercial property.

According to a report in the Wall St. Journal, some banks — including Bank of America Corp. and Wells Fargo & Co. — have been telling borrowers who make income from Airbnb that they’re no longer able to get certain types of loans or that they must pay higher interest rates. [Read more…]

Filed Under: Articles, Real Estate Articles

Everyone knows someone who missed the boat

This year’s April 18 tax deadline has come and gone, but not everyone has filed a 2016 tax return. While many have filed an extension and intend on getting their return in order, too many taxpayers who should file, simply do not. Common culprits are older, retired parents and young adults who are new to tax filing requirements.

Here are some of the reasons why it will help them to file a tax return.

Get withholdings. People who work but earn less than the required filing threshold should file a tax return so they can get back any withholdings their employer may have taken out of their paycheck. [Read more…]

Filed Under: Articles, Tax Articles

What to do if you are selected for a correspondence audit

The IRS is now handling many routine audit reviews through form letters called correspondence audits. These letters come from the IRS and ask for clarification and justification of specific deductions on your tax return. Common issues that trigger a correspondence audit are large charitable deductions, withdrawals from retirement accounts and education savings plans, excess miscellaneous deductions, and small business expenses.

Don’t panic if you get one of these audit form letters. The IRS often uses computer programs to compare individual return deductions with the averages for a person’s income level or profession. If you’ve received a letter, you may have simply fallen outside the averages. As long as you respond promptly, thoroughly, and with good documentation, it won’t necessarily become a contentious issue. The key is to keep proper, well-organized documentation under the assumption you may need it to support your deductions. If you do this right, the correspondence audit will end with a “no change” letter from the IRS, acknowledging you’ve addressed their concerns. Give us a call if you receive one of these letters from the IRS. We’re here to help.

Filed Under: Articles, Tax Articles

IRS is now using collection agencies

The IRS is now using outside collection agencies to collect unpaid tax obligations. This new program will start slowly with only a few hundred taxpayers receiving mailings. The number will grow into the thousands later in the spring and into summer. Taxpayers who are contacted will first receive several collection notices from the IRS before their accounts are turned over to the private collection agencies. The agency will then send its own letter to the taxpayer informing them that the IRS has transferred the account to the agency. These agencies are required to identify themselves as working with the IRS in all communications.

Unfortunately, a change like this can often lead to confusion among taxpayers, which gives scammers a new opportunity to steal taxpayer dollars. The IRS is aware of the potential fraud problems and plans to continue to help taxpayers avoid confusion. The IRS reminds taxpayers that private collection companies, like the IRS, will never approach taxpayers in a threatening way; pressure taxpayers for immediate payment; request credit card information; or request payments in gift cards, prepaid debit cards, or a wire transfer. A legitimate letter from a collection agency associated with the IRS will instruct taxpayers to write a check directly to the IRS.

Filed Under: Articles, Tax Articles

Schedule your midyear tax planning session

Most people don’t include tax planning on their summertime agenda, but maybe they should. The problem with waiting until the end of the year is that you reduce the time for planning strategies to take effect. If you take the time now to schedule a midyear tax planning review, you’ll still have eight months for your actions to make a difference on your 2017 tax return. In addition, proposed tax reform could be cause for additional changes to your tax plan. Planning now for 2017 taxes not only helps reduce your tax burden, but it can help you gain control of your entire financial situation. Give us a call to set up an appointment today.

Filed Under: Articles, Tax Articles

Tax deadlines for May

  • May 15 – Deadline for calendar-year exempt organizations to file 2016 information returns
  • May 31 – Deadline for IRA, SEP, SIMPLE, Roth IRA, MSA, and education savings account trustees to file annual statements (Form 5498) with the IRS, with copies to participants
Filed Under: Articles, Tax Articles

Steer clear of non-lawyers offering Medicaid planning services

As the U.S. population ages, more non-lawyers are starting businesses that offer Medicaid planning services to seniors. While using one of these services may be cheaper than hiring a lawyer, the ultimate costs may be far greater.

If you use a non-lawyer to do Medicaid planning, they may not have any legal knowledge or training. Bad advice can lead seniors to purchase products or take actions that won’t help them qualify for Medicaid and may actually make it more difficult. The consequences of taking bad advice can include the denial of benefits, a Medicaid penalty period or a tax liability.

As a result of problems that have arisen from non-lawyers offering Medicaid planning services, a few states (Florida, Ohio, New Jersey and Tennessee) have issued regulations or guidelines providing that Medicaid planning by non-lawyers will be considered the unauthorized practice of law. [Read more…]

Filed Under: Articles, Elder Law Articles

Rule requiring retirement advisers to put their client’s interests ahead of their own is delayed

President Donald Trump has signed an executive order calling for a review of the so-called fiduciary rule, which was intended to prevent financial advisers from steering their clients to bad retirement investments by requiring these advisers to act in the best interests of their clients. The order delays the rule, which was scheduled to go into effect in April 2017, and the rule may ultimately be repealed.

Prompted by concern that many financial advisers have a sales incentive to recommend retirement investments with high fees and low returns to their clients because the advisers get higher commissions or other incentives, the Department of Labor drew up rules in April 2016 that would require advisers to act like fiduciaries.

The rule required all financial professionals who offer advice related to retirement savings to provide recommendations that are in a client’s best interest. Currently, financial advisers only have to recommend suitable investments, which means they can push products that may benefit them more than their clients. The rule would require advisers to not accept compensation or payments that would create a conflict unless they have an enforceable contract agreeing to put the client’s interest first. Advisers also would have to disclose any conflicts and charge reasonable compensation. [Read more…]

Filed Under: Articles, Elder Law Articles

What is undue influence, and how can it be avoided?

Saying that there has been “undue influence” is often used as a reason to contest a will or estate plan, but what does the term mean?

Undue influence occurs when someone exerts pressure on an individual, causing that individual to act contrary to his or her wishes to the benefit of the influencer or the influencer’s friends. The pressure can take the form of deception, harassment, threats or isolation. Often the influencer separates the individual from loved ones in order to coerce him or her. The elderly and infirm are usually more susceptible to undue influence.

To prove a loved one was subject to undue influence in drafting an estate plan, you have to show that the loved one disposed of his or her property in a way that was unexpected under the circumstances, that he or she is susceptible to undue influence (because of illness, age, frailty or a special relationship with the influencer), and that the person who exerted the influence had the opportunity to do so. Generally, the burden of proving undue influence is on the person asserting that it took place. However, if the alleged influencer had a “fiduciary relationship” with the loved one (meaning that the loved one placed a high degree of trust in the influencer to handle his or her affairs), the burden may be on the influencer to prove that there was no undue influence. People who have a fiduciary relationship can include a child, a spouse or an agent under a power of attorney. [Read more…]

Filed Under: Articles, Elder Law Articles

Understanding the tax consequences of inheriting a Roth IRA

Passing down a Roth IRA can seem like a good idea, but it doesn’t always make the most sense. Before converting a traditional IRA into a Roth IRA to benefit your heirs, you should consider the tax consequences.

Earnings in a traditional IRA generally are not taxed until they are distributed to you. At age 70 1/2 you have to start taking distributions from a traditional IRA. By contrast, contributions to a Roth IRA are taxed, but the distributions are tax-free. You also do not have to take distributions from a Roth IRA.

Leaving your heirs a tax-free Roth IRA can be used as part of an estate plan. However, in figuring out the best type of IRA to leave to your beneficiaries, you need to consider whether your beneficiary’s tax rate will be higher or lower than your tax rate when you fund the IRA. In general, if your beneficiary’s tax rate is higher than your tax rate, then you should leave your beneficiary a Roth IRA. Because the funds in a Roth IRA are taxed before they are put into the IRA, it makes sense to fund it when your tax rate is lower. On the other hand, if your beneficiary’s tax rate is lower than your tax rate, a traditional IRA might make more sense. That way, you won’t pay the taxes at your higher rate. Instead, your beneficiary will pay at the lower tax rate. [Read more…]

Filed Under: Articles, Elder Law Articles

Medicaid’s benefits for assisted living facility residents

Assisted living facilities are a housing option for people who can still live independently but who need some help.  Costs for these facilities can range from $2,000 to more than $6,000 a month, depending on location.  Medicare won’t pay for this type of care, but Medicaid might.  Almost all state Medicaid programs will cover at least some assisted living costs for eligible residents.

Unlike with nursing home stays, there is no requirement that Medicaid pay for assisted living, and no state Medicaid program can pay directly for a Medicaid recipient’s room and board in an assisted living facility. But with assisted living costs roughly half those of a semi-private nursing home room, state officials understand that they can save money by offering financial assistance to elderly individuals who are trying to stay out of nursing homes. [Read more…]

Filed Under: Articles, Elder Law Articles

How to pass your home to your children tax-free

Giving your house to your child or children can have tax consequences, but there are ways to accomplish this tax-free. The best method to use will depend on your individual circumstances and needs.

Leave the house in your will

The simplest way to give your house to your children is to leave it to them in your will. In 2017, as long as the total amount of your estate is under $5.49 million it will not pay estate taxes. In addition, when your children inherit property it reduces the amount of capital gains taxes they will have to pay if they sell the property. Capital gains taxes are paid on the difference between the “basis” in property and its selling price. If children inherit property, the property’s tax basis is “stepped up,” which means the basis would be the value of the property at the time of death, not the original cost of the property.

There are some downsides to this approach. Some states have smaller estate tax exemptions than the federal exemption, meaning that leaving the property in your estate may cause it to owe state taxes. Also, if you were to need Medicaid at any time before you died, a lien might be put on the property and it might need to be sold after your death to repay Medicaid. [Read more…]

Filed Under: Articles, Elder Law Articles

IRS: Account transcripts can serve as estate tax closing letter

A recent IRS notice confirms that an account transcript issued by the IRS qualifies as a substitute for an estate tax closing letter, as long as the transcript includes the proper transaction code.

An estate tax closing letter indicates that the IRS has accepted an estate tax return and that the estate’s federal tax liabilities have been satisfied. Once the letter has been received, it makes it clear to the executor of the estate that it can proceed with finalizing the estate administration process.

The receipt of the closing letter is often needed to meet requirements for state law probate proceedings. It’s rare for the IRS to reopen an estate tax return after a closing letter has been issued, except in certain extreme circumstances such as fraud or a major error by the IRS. [Read more…]

Filed Under: Articles, Estate Planning Articles

Retirement accounts: Tips for taxpayers turning 70 1/2

It’s a big year for the first set of baby boomers: They’re turning 70 1/2. And that means getting prepared for their first mandatory distributions from tax-sheltered retirement accounts.

The first thing to keep in mind is that the amount of your required annual withdrawal is based on the assets in the account as of the prior December 31. For a taxpayer with multiple 401(k) plans, he or she must take a proportional distribution from each of the accounts. If a taxpayer has multiple IRAs, the payouts can be uneven. That is, the entire amount can be taken out of one IRA, if the taxpayer chooses. [Read more…]

Filed Under: Articles, Estate Planning Articles

New law allows individuals to create special needs trusts

Buried in a new federal law is a tiny change that will now allow individuals to set up their own special needs trusts.

The sum total of the change is two words — “the individual” — intended to correct a more than 20-year-old error. The change is called the Special Needs Trust Fairness Act.

Authorized under the Omnibus Budget Reconciliation Act of 1993, special needs trusts protect assets and allow an individual to maintain eligibility for governmental benefits such as Supplemental Security Income (SSI) and Medicaid.   [Read more…]

Filed Under: Articles, Estate Planning Articles

In will contest, no need to oversell decedent’s capacity

Imagine a situation where a loved one dies and there is a contest over the validity of the will. The question arises: What was the decedent’s mental state in drafting the will?

A typical, knee jerk answer is that the decedent had a perfectly clear state of mind.

However, testamentary capacity doesn’t require such a high level of clarity in communication and comprehension. Further, overstating a decedent’s capacity might actually lead a trier of fact to become skeptical of the will proponent, especially if other evidence exists that the decedent’s mind wasn’t as clear as stated. [Read more…]

Filed Under: Articles, Estate Planning Articles

Changes proposed by Trump could open up big estate planning opportunities

With proposals to repeal the federal estate tax and the generation-skipping transfer (GST) tax on the table, the new administration may be opening up some rare estate planning options.

Under President Donald Trump’s proposal, the current step-up in basis for income tax purposes on assets owned at death would be limited to $10 million of assets. The intention, according to the proposal, is to exempt small businesses and family farms.

It’s likely that assets exceeding $10 million in value would be either subject to carryover basis rules of some kind or would be subject to capital gains tax at death. Under Trump’s proposal, the current capital gains tax rate of 20 percent would be retained. [Read more…]

Filed Under: Articles, Estate Planning Articles

2013 unclaimed tax refunds

The IRS announced that an estimated one million taxpayers who did not file an income tax return in 2013 could claim their share of $1 billion in unclaimed refunds for the 2013 tax year. The law gives most taxpayers a three-year time period to claim a tax refund. After that time, the money belongs to the U.S. Treasury. So if you did not file in 2013, to be safe, send your 2013 tax return via certified mail to arrive at the IRS by April 18.

Filed Under: Articles, Tax Articles

Springtime remodeling – know the tax impacts

Spring fever often influences homeowners to update and remodel. Maybe you’re considering a new project, too. You may need to replace your deck or remodel your kitchen. If you have a remodeling project coming up, you should understand the tax consequences.

If your project qualifies as an improvement to your home, you’ll enjoy some tax benefits. But if the project is a repair, there’s generally no tax benefit. Unfortunately, it’s not always easy to tell the difference.

An improvement is defined by the IRS as something that adds value to your home or extends its life. Putting in a new kitchen, building an extension or adding a new deck are considered improvements because they add value. Replacing the roof is an improvement because it extends the life of your home. [Read more…]

Filed Under: Articles, Tax Articles

IRS interest rates remain the same for second quarter 2017

Interest rates charged by the IRS on underpaid taxes and applied by the IRS on tax overpayments will remain the same for the second quarter of 2017 (April 1 through June 30). Therefore, the rates will be as follows for individuals and corporations:

For individuals:

  • 4% charged on underpayments; 4% paid on overpayments.

[Read more…]

Filed Under: Articles, Tax Articles

Apply for an extension if you can’t file by April 18

Tax time can be stressful, but don’t panic if you can’t file your tax return on time. There’s still time to get an automatic six-month deadline extension.

There are four ways to obtain an extension:

  1. File a paper copy of Form 4868 with the IRS and enclose your payment of estimated tax due.
  2. File for an extension electronically using the IRS e-file system on your computer.
  3. Using Direct Pay, the Electronic Federal Tax Payment System, pay all or part of your estimated income tax due and indicate that the payment is for an extension.
  4. Have your tax preparer e-file for an extension on your behalf.

[Read more…]

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What’s due on April 18?

Tuesday, April 18, is a major tax deadline. Here are some of the tax filing and related deadlines:

  • 2016 individual income tax returns.
  • Calendar-year 2016 C corporation income tax returns.
  • 2016 annual gift tax returns.
  • 2016 IRA contributions.
  • 2017 individual estimated tax first quarter installment.
  • 2013 individual tax return amendments unless the 2013 return had a filing extension.
Filed Under: Articles, Tax Articles

‘No vacancy’ is no defense in promotion lawsuit

Can an employer be sued for not promoting someone, even if there’s no vacancy in the job to which she wants to be promoted?

Maybe, according to a federal appeals court in Washington, D.C.

Janean Chambers was a blind black woman who worked for the Department of Health and Human Services. She was at a GS-9 pay grade and wanted to be promoted to a GS-11 job. [Read more…]

Filed Under: Articles, Employment Law Articles

Yoga teacher could be fired for being ‘too cute’

A Manhattan yoga teacher who claimed her female boss fired her because the boss’s husband thought she was attractive can’t bring a lawsuit for unjust termination, a judge has ruled.

Dilek Edwards worked as a yoga instructor and massage therapist at a chiropractic clinic owned by Stephanie Adams – a former Playboy model – and her husband, Charles Nicolai.

Edwards apparently had given Nicolai some massages, and Nicolai praised her work and told her that his wife might become jealous because she was “too cute.” [Read more…]

Filed Under: Articles, Employment Law Articles

New rules for company ‘wellness’ programs

Corporate wellness programs – designed to help workers quit smoking, manage stress, lose weight and address other health issues – are becoming popular with employers. Many businesses see them as a valuable perk as well as a way to reduce absenteeism and health care costs.

However, under federal law, these programs must be voluntary – employees can’t be forced to participate in them. Further, there are limits on how companies can obtain and use medical and genetic information about workers and their families.

The federal Equal Employment Opportunity Commission has issued new rules that clarify what’s allowed. [Read more…]

Filed Under: Articles, Employment Law Articles

Workers’ ‘right to gripe’ gets another boost

The National Labor Relations Board is cracking down on workplace rules that are designed to promote harmony and civility, but that restrict employees from complaining about their working conditions.

All employees (even those who don’t belong to a union) have a right under federal labor law to talk to each other about their pay and conditions and to agitate for improvements. Here are some examples of workplace rules that the NLRB thinks might violate that right: [Read more…]

Filed Under: Articles, Employment Law Articles

Should companies buy wage-and-hour insurance?

Wage-and-hour lawsuits under the Fair Labor Standards Act have increased by 30 percent in just the last five years, and with the huge changes that took place on December 1, that number is expected to increase even further.

Some companies are buying specific insurance policies to protect them against these claims.

If a business already has an employment practices liability insurance (EPLI) policy, this might not be necessary because these claims may already be covered. However, many EPLI policies specifically exclude coverage for wage-and-hour violations. Other general liability policies might in theory cover wage-and-hour suits, but these insurers are often very aggressive in contesting their obligation to cover such claims after they arise.

Businesses that are concerned might want to review their policies with an employment attorney.

Filed Under: Articles, Employment Law Articles

What the new overtime rules will mean for businesses and employees

Major changes to the federal overtime rules went into effect on December 1, and this could mean big changes in the workplace.

Some 4.2 million employees who aren’t eligible for overtime now will become eligible under the new rules. This could prompt many businesses to reduce overtime hours, hire new workers, raise or lower salaries, convert salaried employees to hourly employees, and adjust bonuses and commissions. It could also mean changes for workers who telecommute or have flexible schedules.

In general, employees must be paid time-and-a-half if they work more than 40 hours in a week, unless the employee is “exempt.” Currently, employees are “exempt” if they earn at least $23,660 per year; are paid on a salary basis; and perform managerial, professional, or administrative tasks. Employees who do not have managerial, professional, or administrative jobs are exempt if they earn more than $100,000. [Read more…]

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Drug testing policies may need to be revised

If you have a policy that requires drug testing after a workplace accident or injury, you may need to change it as a result of new rules issued by OSHA.

The new rules generally require that companies have a reporting procedure in place for work-related injuries and illnesses, and prohibit them from discouraging workers from reporting injuries. The catch is that, according to OSHA, a policy that requires drug testing after a workplace accident could discourage workers from reporting accidents in the first place.

To be clear, OSHA is not saying that you can never give a drug test after a mishap. But to justify a test, two things must be true: [Read more…]

Filed Under: Articles, Business Law Articles

What happens to unused ‘flexible spending’ funds?

Many companies have flexible spending accounts that allow employees to pay health care and dependent care expenses with pre-tax dollars. The biggest drawback to these accounts is that they’re “use it or lose it” – so if employees put money into an FSA and don’t spend all of it on qualified expenses during that calendar year, they forfeit the remainder.

So what happens to the money they forfeit?

The short answer is that the business can simply keep it. However, if a business wants to ease the burden on employees and make the FSA a more attractive benefit, there are several other options allowed under the tax laws: [Read more…]

Filed Under: Articles, Business Law Articles

Many computer ‘hacks’ are actually low-tech thefts

All businesses are scared these days of having their data stolen by highly sophisticated foreign computer experts – and yet a surprisingly large number of “hacks” are actually very low-tech affairs, carried out by people with minimal computer skills. The good news is that some simple measures can reduce the risk.

According to a study by the Ponemon Institute, the vast majority of CEOs view sophisticated intentional hacking as the biggest data security problem they face. The vast majority of IT managers, on the other hand, see the biggest threat as careless employees who haven’t received basic security training about phishing, passwords, cloud access, and the like.

To take one example, you might have heard that a St. Louis Cardinals baseball team employee was recently sentenced to jail for hacking into the computer secrets of a rival team, the Houston Astros. But you might not know exactly how he did it.

[Read more…]

Filed Under: Articles, Business Law Articles

Federal penalties are increasing dramatically

The maximum penalties that can be imposed on businesses by federal agencies are being dramatically increased, as a result of a new law passed by Congress.

OSHA’s civil penalties hadn’t increased since 1990, but that changed on August 1, 2016, when they jumped roughly 80%. The top penalty for a serious OSHA violation went from $7,000 to $12,471, and the top penalty for a willful or repeated violation went from $70,000 to $124,709.

What’s more, if an employer was inspected before August 1, but OSHA didn’t issue a citation until after August 1, OSHA can issue a penalty at the new higher rate. Since OSHA has six months from the date of a violation to issue a citation, it’s expected that a lot of companies that were inspected in the first part of 2016 will see large penalties assessed after August 1. [Read more…]

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New law protects trade secrets

President Obama has signed a new federal law that expands the ability of companies to sue when someone steals or misuses a trade secret.

The law also contains new requirements for employment contracts that refer to trade secrets – which means that many such agreements should now be revised.

The “Defend Trade Secrets Act,” or DTSA, will change the legal landscape by making misuse of trade secrets a federal issue, comparable to patent, trademark and copyright infringement.

[Read more…]

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Current tax law requires health insurance

During his first week in office, President Trump signed an executive order asking federal agencies to reduce the economic burden the Patient Protection and Affordable Care Act (ACA) puts on American citizens.

Unfortunately, this executive order is causing confusion. Many people are left wondering if fines will no longer be imposed or rules no longer need to be followed. Until the agencies impacted by this executive order publish their intent, act as though current laws are still in play. This includes: [Read more…]

Filed Under: Articles, Tax Articles

More credits require questions

Common errors have helped to make the Earned Income Tax Credit (EIC) a major source of what the IRS calls “improper payments.” The agency estimates that of the $66 billion in EIC funds paid in 2015, nearly a quarter were collected by filers who didn’t qualify to receive them. To help combat this problem, the IRS now requires additional confirmation of information regarding the EIC and three new credits beginning in 2016.

Now if you claim the EIC, the Child Tax Credit (CTC), the Additional Child Tax Credit (ACTC), or the American Opportunity Tax Credit (AOTC), additional information may be requested of you.

For the CTC and ACTC, you may be asked how long your children lived with you over the past year, or whether they lived with an ex-spouse, relatives, or other guardian.

[Read more…]

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2016 proof of health insurance: the Form 1095 wrinkle

Under the current Affordable Care Act (ACA), all Americans must have health insurance. If you receive your health insurance through the ACA marketplace or from your employer, you will receive a Form 1095. This form is used as documentation that you have adequate insurance and is used for other ACA reporting and potential tax benefits.

What’s happening now

Prior to filing your tax return you should receive your Form 1095 and review it for accuracy. If you receive your health insurance through a state or federal marketplace you will receive Form 1095-A. Otherwise your version of the form will be either Form 1095-B or Form 1095-C. Unfortunately, some providers of the “B and C” versions of Form 1095 are still having trouble issuing the forms on time. Because of this, the IRS has issued a notice backing off on this “receive the form before you file” requirement. While you will still need to prove you have adequate health insurance, the suppliers of the Form 1095-B and Form 1095-C were given until as late as March 2 to get the form out to you.

[Read more…]

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Reminder: Partnership tax returns due one month earlier

Remember, partnership tax returns are now due on March 15. This is a month earlier than last year. The change is important to note, as filing the tax return late could result in unexpected penalties. The new due date now aligns filing Form 1065 with other flow-through entities like S corporation Form 1120S. If you get caught by surprise with this earlier filing date, contact us immediately.

Filed Under: Articles, Tax Articles

Major tax deadlines for March

March 2

  • Large employers and others must furnish Form 1095-B or Form 1095-C to employees.

March 15

  • 2016 calendar-year S corporation Form 1120S income tax returns are due.
  • 2016 calendar-year partnerships Form 1065 income tax returns are due.

March 31

  • Forms 1095-B and 1095-C due to the IRS, if filing electronically. Employers who have 250 or more employees are required to file electronically.
Filed Under: Articles, Tax Articles

Moving out? Record your home on your smartphone

If you’re getting divorced and you’ll be moving out while your spouse stays in the house, it’s a good idea to use your smartphone to make a video record of the home at the time you left it.

For one thing, you might not be able to take everything that’s important to you with you at the time you move, especially if you’re going to a smaller place. And once you move out, you’ll have little control over the home’s maintenance and upkeep.

As a result, whether accidentally or on purpose, your spouse might throw out, destroy or sell belongings of yours that have significant monetary or sentimental value. Your spouse might also let the house fall into disrepair, or there might be some damage to the home, which could lower its value. [Read more…]

Filed Under: Articles, Family Law Articles

You’re splitting up – who keeps the engagement ring?

So it wasn’t “until death do us part” after all, but there’s still that dazzling engagement ring. He wants it back; she wants to keep it. Who wins?

As with many things in the law, it depends on the facts, and it also depends on the state.

In some states, such as California, accepting an engagement ring is usually viewed as a promise to marry someone. Once a woman has said “I do,” the promise has been fulfilled and it’s hers to keep, even if the couple later get divorced.

[Read more…]

Filed Under: Articles, Family Law Articles

Live-in partner is awarded partial custody of child

A mother’s live-in romantic partner who developed a strong relationship with her child can get partial custody of the child after their breakup, a Pennsylvania court recently decided.

The mother gave birth to the child in 2007 and quickly separated from the child’s father. She then began a relationship with a woman known as C.B.

C.B. became very involved in the child’s life, participating in his medical appointments, helping select his schools, and communicating with his teachers and doc- tors. The child also had a close relationship with C.B.’s extended family, referring to her father as “Pappy” and her siblings as “aunt” and “uncle.” C.B.’s family members babysat the child, and C.B.’s mother was the child’s emergency contact. [Read more…]

Filed Under: Articles, Family Law Articles

‘Buy-sell’ agreements should be reviewed by a family lawyer

It’s very common for small businesses to have “buy-sell” agreements. These say that if one owner leaves, dies, or gets divorced, the other owners can buy out that owner’s interest. The purpose is to make sure that if something happens to one owner, the other owners can continue to operate the  business without having an ex- spouse, child, or stranger as an unwanted partner.

If you have such an agreement or are thinking of signing one, it’s a very good idea to have it reviewed by a family law attorney. This is true if any of the owners might someday get divorced, even if you personally are unlikely to get divorced or aren’t even married.

Here’s why: Buy-sell agreements typically set a price at which the other owners can buy the owner’s shares, or a method for determining the price, such as book value, a multiple of current annual profits, an independent appraiser’s estimate, or a board valuation made in good faith.

[Read more…]

Filed Under: Articles, Family Law Articles

Modern love clouds end of alimony

Many divorce agreements say that a spouse can stop paying alimony if the other spouse remarries or begins living with a romantic partner. That sounds simple – but in today’s world, romantic relationships can be anything but simple. Sometimes, as on Facebook, the best way to describe a new relationship is “it’s complicated” and whether a spouse can stop paying alimony can be complicated, too.

Here are some examples:

* Steven and Lorraine Robitzski divorced in 2004, and Steven was ordered to pay Lorraine $2,500 a month in alimony, unless she cohabited with someone. Lorraine found a new boyfriend, and Steven went to court claiming that they were living together.

According to Steven, Lorraine and her new beau spent about 100 nights a year together, they held themselves out as a couple at family and social activities and on Facebook, and the couple’s children referred to the boyfriend as “Pap Thom.”

[Read more…]

Filed Under: Articles, Family Law Articles

A NH Real Estate Transfer Tax Primer

The following article by Attorney David Beliveau was published by the New Hampshire Bar Association.

Tax Law: Amended Last Year: A NH Real Estate Transfer Tax Primer

By: David Beliveau

The New Hampshire real estate transfer tax (NH RSA 78-B) – a tax on the transfer of New Hampshire real estate – is $0.75 per $100 of the full price of or consideration for the real estate for the purchaser and the seller (meaning half of the total tax is paid by the purchaser and half by the seller).

The tax, collected by the NH Department of Revenue Administration (DRA), requires filing DRA forms PA-34, Inventory of Property Transfer; CD-57-P, Declaration of Consideration Real Estate Purchaser (Grantee); and CD-57-S, Declaration of Consideration Real Estate Seller (Grantor). The law changed last year in the case of real estate transfers to revocable trusts and LLCs. [Read more…]

Filed Under: Articles, Real Estate Articles, Tax Articles

Package delivery is a headache for landlords, condos

The explosion of online shopping has created a big headache for landlords and condo associations – what should be done about the deluge of packages being delivered to residents?

Staff at large apartment buildings often strain under the effort to accept, sort and deliver hundreds of packages. Smaller landlords and condo associations are striving to figure out the best policy: Should packages be left outside, where they are vulnerable to weather and theft? Is there a better, workable way to get them to tenants and unit owners?

Camden Property Trust, a huge landlord with 59,000 apartment units in 10 states, recently announced that it was banning package deliveries altogether. Camden tenants must now pick up packages at a post office, or else have them shipped to their workplace or to the home of a friend or relative. [Read more…]

Filed Under: Articles, Real Estate Articles

If you own real estate, you need a will

Anyone who owns real estate needs to have a will that indicates what should happen to the property if he or she suddenly passes away.

You might assume you know who would inherit the house, but without a written will, the inheritance would be decided by state-law rules that might not be exactly what you’d expect.

Even if the house ultimately goes to the person you want, the lack of a will might mean that ownership of the house remains in legal limbo for an extended period of time. This can create unnecessary complications when it comes to paying property taxes and arranging for continued utilities and insurance coverage. If you have a mortgage, it can create even bigger headaches. [Read more…]

Filed Under: Articles, Real Estate Articles
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