Big Changes In Tax Law Bring Big Changes for Divorces

Posted by on January 16, 2018 in Alimony, Collaborative Law, Divorce, Family Law, Uncategorized

  The Tax Cuts and Jobs Act of 2017 (the new tax law) was signed into law by President Trump on December 22, 2017. Some of the changes from the law go into effect on January 1, 2018 and will affect the tax filings for the 2018 taxable year.  Notable changes that will affect divorcing spouses and parents are as follows: No more claiming your kids as tax deductions. Effective for the 2018 tax year, parents can no long claim their children as dependents for the purpose of deducting them on their taxes.  This change will certainly modify divorce orders and agreements as parents no longer will need to agree about who will claim the children on their taxes each year.  However, while Congress has taken away the ability for parents to claim your children on their taxes, it did double the child tax credit from $1000 per child to $2000 and allow parents to alternate this deduction for children each year.  All divorce agreements and orders after January 1, 2018 should contain language for how parents will claim the child tax credit.  Congress also allows all taxpayers earning up to $400,000 to claim the child tax credit, an increase from the prior cutoff income level of $110,000. Alimony payments are no longer deductible by the payor. Beginning with the 2019 tax year, for all divorce agreements signed after December 31, 2018 and later, those who pay alimony can no longer deduct alimony as an itemized deduction.  Those receiving alimony no longer have to claim alimony as income and will not be taxed on the payment of alimony to them.  This is a significant change.  According to the United States Census Bureau, 243,000 people received alimony in 2017.  This law change will speculatively could impact divorce negotiations with couples arguing about whether alimony should be paid when there is no longer a tax benefit to the payor.  It appears that the IRS will allow all ex-spouses who modify their alimony to follow the 2017 tax law in claiming alimony as a deduction for those that pay it and having those that receive alimony claim it as income so long as their agreements or orders specifically state that they wish to follow the old tax law and the decree or agreement was made before December 31, 2018. The new tax law eliminates many itemized deductions. Starting with the 2018 tax year, the new law maintains deductions for charitable contributions, retirement and student loan interest but eliminates other deductions.  The law limits how much a taxpayer can deduct from property taxes as well. However, Congress has doubled the standard deduction for individuals from $6,350 to $12,000 and for married couples from $12,700 to $24,000. Parents can use 529 education plans in creative ways. The new law allows parents to use up to $10,000 per year per child in funds in a...

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FREE CONSULTATION NIGHT

Posted by on August 3, 2016 in Collaborative Law, Family Law, S&S Firm News, Uncategorized

Shanelaris & Schirch is hosting a free consultation evening on Wednesday, August 31st from 5:00 to 8:00 p.m. Come in for a one-on-one free consultation with one of our highly skilled and experienced attorneys. Get immediate information and free legal advice. Consultations will be scheduled for 30 minutes between the hours of 5pm and 8pm. Call 594-8300 to reserve your time now to talk with the attorneys about your family law or divorce law concern. We look forward to the opportunity to...

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Facebook Posts Can Land You in Jail

Posted by on October 26, 2015 in Criminal Law, Family Law, General Law, Parenting Rights & Custody, Restraining Orders, Uncategorized

This year the New Hampshire Supreme Court upheld a conviction of a man for stalking, criminal threatening and witness tampering based on his Facebook posts. In the case of State of New Hampshire v. Brian Craig (https://www.courts.state.nh.us/supreme/opinions/2015/2015011craig.pdf ), Mr. Craig was found guilty of these charges after a series of posts directed at one specific victim.  The victim worked as a bartender and waitress at a restaurant that Mr. Craig and his friends frequented.  Mr. Craig tried to have a relationship with the victim which she declined.  He began writing letters to her and the victim found the letters threatening and intimidating.  The victim contacted the police and the police served Mr. Craig with a stalking warning letter.  After receiving warning letter, Mr. Craig sent another written letter to the victim.  The victim then obtained a domestic violence protective order.  After receiving the restraining order informing him he was to have no contact with the victim, Mr. Craig began posting a series of comments on his public Facebook page.  The victim had not friended Mr. Craig but found his posts through a Facebook search because the comments were public.  After reading the posts, the victim called the police.  Mr. Craig was arrested for the criminal charges including violations of the restraining order. Mr. Craig defend himself by saying that he had not named the victim specifically by her name in his posts and did not send her the messages directly – the comments were merely posted on his public profile page.  However, the Court found that Mr. Craig had specifically told the victim he had put comments on his Facebook page.  When he did this, he was directing the communications to her.  Mr. Craig had no other logical reason to make the posts on his Facebook page.  The Court found that Mr. Craig was specifically trying to communicate his comments to the victim.  The Court found that the comments were meaningless to anyone else except the victim and the intent was to stalk and threaten the victim. When posting to Facebook, be aware that public comments can make a personal legally responsible for the comments made.  It is best to vent any negative comments to your friends and in your private off-line diary and not on Facebook or any other social...

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Tax Dependents and the Affordable Care Act

Posted by on June 25, 2014 in Child Support, Family Law

The Affordable Care Act (“ACA”) went into effect on January  1, 2014 and requires that all parents must provide health insurance coverage for themselves and for their children.  Failure to maintain  health insurance for yourself and your children will result in having to pay a penalty to the IRS.   The ACA has provisions that affect how divorced or separated parents provide health insurance for their children. The ACA provides that the parent who claims the child as a dependent on their federal income tax return is the one required to provide proof of health insurance coverage to the IRS when the tax return is filed.  The responsibility of reporting the health care coverage for the child cannot be assigned by a court order or divorce decree.  For example, if you are the custodial parent with the tax deduction for your children and the non-custodial parent is ordered to pay for health insurance for the kids, the custodial parent remains liable to the IRS to show proof of insurance coverage or pay a penalty. If the non-custodial parent has not complied with the court order and has failed to provide the insurance, the custodial parent claiming the deduction for the children will still be the one to pay the penalty. The ACA may create the possibility for problems among parents where cooperation and communication is difficult if the dependency exemption switches between parents from year to year or the non-insuring parent always claims the children as an exemption.  The parent with the dependency exemption may find it difficult to provide proof of insurance to the IRS because the other parent carries the health insurance and refuses to provide that proof.  In high-conflict relationships between separated or divorced parents the issues of medical insurance coverage and tax penalties could drive them back to court. The law does provide a mechanism for individuals to file for an exemption from having to provide insurance for various reasons such as religious reasons, incarceration of the parent who was providing health coverage, if coverage is deemed “unaffordable” or for some other hardship under the law.    Parents who are currently in the divorce process may need to have an order or agreement that the person who covers health insurance be ordered to provide proof of insurance or reimburse the custodial parent for penalties incurred from the IRS for failure to provide proof of insurance.  Parents should seek advice from their tax preparer, accountant or CPA when preparing their taxes....

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