Simple Year End Tax Tips

taxtips.jpgAs the end of the year approaches, the following simple tax tips can keep taxes as low as possible.

    1. Charitable gifting. Charitable donations may be used as deductions against your taxable income.  However, all charitable donations must be supported with written receipts unless under $250 in which case a bank record is sufficient.  Also, donations of services or your time are not tax deductible.
    2. Gifting in general. Each individual may gift up to $13,000 per year to an unlimited number of individuals without filing a gift tax return.  Any gifts over $13,000 per year reduce the lifetime gift tax exclusion of $1,000,000.  Once the lifetime exclusion is exhausted, gift taxes must be paid.
    3. Pay property taxes early. Real estate taxes are deductible.  For taxes due early next year, if you pay them this year, you can use them as a deduction.
    4. Sell poor performing securities. Losses can be offset against gains reducing any capital gains.  Excess losses can be deducted, but only up to $3,000 per year.
    5. Increase retirement plan contributions. Retirement plan contributions reduce taxable income.
    6. Increase business expense purchases. Purchases of business equipment, supplies, etc., can be used as taxable deductions.
    7. Maximize necessary medical expenses. The purchase of
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The Dependency Tax Exemption Requirements Have Changed For 2009!

taxdep.jpgIn 2008, the IRS amended Code Section 152(e), the section which addresses the subject of the child dependency exemptions for divorced or separated parents. The old rule and procedures have been changed dramatically.

Here is a summary of the dependency exemption requirements:

  • The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them.
  • The child must be (a) under age 19 at the end of the year, (b) under age 24 at the end of the year and a full-time student, or (c) any age if permanently and totally disabled.
  • The child must have lived with you for more than half of the year.
  • The child must not have provided more than half of his or her own support for the year.

If the child meets the rules to be a qualifying child of more than one person, you must be the person entitled to claim the child as a qualifying child.  (To read the special test for a qualifying child of more than one person, click here.

In most cases, but not always, a child of divorced or separated parents will qualify as a … Read More... “The Dependency Tax Exemption Requirements Have Changed For 2009!”

Estate Planning For The Modern Family – Use Of The QTIP Trust For Second Marriages

qtip.jpgAs we all know, the typical family from the 1950’s television shows such as “Leave it to Beaver” have become a rarity over the years.  A couple celebrating their golden wedding anniversary is not so commonplace.  Today, approximately fifty percent of all marriages end in divorce.  In the traditional family, estates usually involve wills and the use of “joint and survivorship” ownership between husband and wife or “beneficiary designations” to ensure that upon the death of a spouse everything would pass to the surviving spouse.  However, in today’s modern family, there may be a second or even third spouse and children from prior marriages.  How does an individual take care of his or her current spouse yet protect his/her children from a prior marriage?

The problem with leaving everything outright to one’s spouse in such a family is that the spouse may presumably leave everything to a new spouse or to their own children upon their death, leaving the children from one’s prior marriage with nothing.  Even providing for one’s children in one’s will may not solve the problem because in Ohio a surviving spouse has certain statutory rights.  These include:  (1) the first $40,000 of the deceased spouse’s estate; … Read More... “Estate Planning For The Modern Family – Use Of The QTIP Trust For Second Marriages”

Job is Lost! Now What Do I Do?

joblost.jpgIt is newsworthy that the State of Ohio has taken major “hits” in the job loss category and that our unemployment rate approaches 10%.  Recently, General Motors, aka Delphi, has closed most plants in Dayton causing a massive loss of jobs in the manufacturing sector.  Then, National Cash Register (NCR) announced the company was moving its headquarters and nearly fifteen hundred (1500) jobs to a suburb of Atlanta, Georgia.  The Dayton Daily News has reported that eleven (11) policemen are slated to “lose their jobs” due to budgetary constraints.  Also, businesses associated with supplying the auto industry with parts and services are feeling a financial “crunch” as their major or primary customer was General Motors, aka Delphi.

So, what is a parent (Father or Mother) to do when facing or experiencing a loss of employment?

Scenario #1:   Father is the Obligor (parent paying child support to the Mother/Obligee). He was employed by National Cash Register (NCR).  He does not want to move to the suburb of Atlanta, Georgia, wherein the new company headquarters shall be located.  He does not want to leave the Dayton community as he wants to remain in contact with his children and he has an “upside … Read More... “Job is Lost! Now What Do I Do?”

The Name Game Revisited…

sschange2.jpgI haven’t posted on this topic since October 18, 2008. My fellow blogger, Attorney Dick Price, publisher of the Divorce and Family Law Blog in Tarrant County, Texas, wrote an interesting post about trying to “force” a soon to be ex-wife into taking back her former name. The analysis under Ohio law would be the same as his under Texas law. Here is what Dick wrote on April 11, 2009:

A question that comes up occasionally is whether a husband can make his ex-wife change her last name so that she no longer uses his last name. The short answer is NO.

While adults can change their own names either as part of a divorce or as a separate action, the Texas Family Code does not provide a means to force someone else to change her name.

So, if you can’t force her to change her name, can you talk her into it? Maybe, but there are some difficulties associated with the name change. She would have to change her driver’s license and Social Security card. She would need to change over credit cards and loans. In other words, your ex-wife may not want to put up with the aggravation … Read More... “The Name Game Revisited…”

Kids Say That Divorced Parents Should Pay The Same Amount For Child Support

child_surv.jpgI came across an interesting survey last month in the Gordon Poll Youth Survey published by the Wilmington Institute Network. Dr. Robert Gordon is the founder and director of the Wilmington Institute of Trial and Settlement Sciences. He is a past president of the Texas Psychological Association and is author of “On the Witness Stand.” He is both a clinical psychologist and a lawyer. The work of Dr. Gordon and the institute team has been featured on the MacNeil-Lehrer News Hour, ABC, Nightline, CNN, Fox News, Larry King Live, Good Morning America and USA Today.

The Gordon Poll Youth Survey focuses on family life issues. It is conducted for the benefit of parents, educators and members of the legal and mental health professions. The May 2009 survey was compiled from a sample size of 1,000 children between ages 14-18, and they are from a self-selected national sample that includes all 50 states.

The Question for May was: “In a divorce, how much money should each parent pay to support their children?” n for May was: “In a divorce, how much money

Answers in %

Each parent should pay the same

[bar.gif] 40.22%

The parent who earns more should pay more

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Military Divorces – Factors To Consider Other Than Military Pensions

tricare.jpgIn April, one of our Family Blog Articles focused upon the division of military pensions. The focus of this article is upon other benefits available to former spouses of military members. Those potential benefits include the following:

A. Commissary Benefits: Commissary is defined as “a store, as in an army camp, where food and supples are sold”. The Commissary at Wright Patterson Air Force Base is a very large “grocery store” with all the amenities and the usual departments to include: Meat/Fish/Poultry, Fresh Produce, Bakery, Deli, Frozen Food Products, Canned Food Products, Paper Products, Cereal and Grain Products. The primary benefit to the former spouse is that the prices are much less expensive than prices at local grocery stores. Shopping there is a true benefit in terms of dollars saved!

B. Base Exchange Benefits: The Base Exchange is similar to a large department store having the following departments: Men’s Clothing, Women’s Clothing, Children’s Clothing, Shoes, Make-Up, Gifts, Jewelry, Television Sets and Electronics, Small Appliances, and other Miscellaneous Departments. As in Item A. above, the prices are less expensive than prices at local department stores providing another true benefit in terms of cost savings.

C. Base Hospital and Medical Benefits: This … Read More... “Military Divorces – Factors To Consider Other Than Military Pensions”

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