On Tuesday, July 12th, the U.S. Attorney’s Office announced that Kathleen Baker, a former office manager at Bathgate, Wegener & Wolf (a real-estate partnership in Lakewood) has admitted to embezzling $1.14 million over six years. Prosecutors say that Baker created a fictitious company (also known as a “straw man” company) called “Corporate Solutions,” and directed funds to a bank account under its name. The money was subsequently used to pay off her credit card bills and personal debts. Baker faces up to 20 years in prison. [Read more…] about NJ Fraud Case Highlights Importance of Internal Control
Patricia Spence V.S. Walter Guy Chalow
Patricia, the plaintiff, and Walter, the defendant, were divorced in January 1995, with two children. The PSA (property settlement agreement) incorporated into their final judgment a child support obligation upon the defendant of $150 week. The PSA noted that this amount was not “based on the child support guidelines because both parties are self-employed”(Walter was a contractor; Patricia, a “credit searcher”) their incomes fluctuate and cannot be precisely determined.” The court determined that the defendant’s annual income was $153,199 and set a child support obligation of $267 per week.
Dementia: A Growing Challenge
8 million Americans currently exhibit some signs of dementia and this population is steadily increasing. Eventually, few people will be spared the challenge of caring for a relative with this disease. In many cases, a physician may determine that the patient requires 24 hour supervision. If no relative or friend can provide the required supervision, it can result in considerable caregiver expenses. Often, people will hire unlicensed caregivers to minimize this cost. In a recent Tax Court case, the issue presented was whether or not these expenses are deductible for income tax purposes. [Read more…] about Dementia Caregiver Expenses Tax Deductable!
On June 30th, 2011, New Jersey Governor Chris Christie signed into law portions of the legislature’s New Jersey budget that included a 25% decrease for the minimum corporate business tax on S-corporations. The new rates are as follows:
Gross Receipts Minimum Tax
$1 million or more $1,500
Less than $100,000 $375
The only exception to the decrease will be S-corporations which are members of affiliated or controlled groups with payrolls of $5,000,000 or more. Their minimum tax remains at $2,000.
This last exclusion from the new minimum corporate tax law seems to unfairly discriminate against staffing agencies and service corporations, as their primary expense is payroll. In fact, payroll IS the product being sold. Typically staffing agencies have controlled groups and reach the $5,000,000 threshold. Yet, solely due to their line of business, they will not benefit from the new reduction.
The new same-sex marriage law passed by New York State will present a serious challenge for many same-sex couples seeking a divorce. WhileNew York now recognizes same-sex marriage, most other states do not. Should a New York couple move to one of those states and decides to divorce, they may face great difficulty. The state may simply refuse to grant a divorce to a union it does not legally recognize. Greg Abbott, Texas’ attorney general, has already intervened with this argument in two same-sex divorces. To add to the complication, even if the couple decided to return to New York, the state requires residency of at least 90 days to obtain a divorce (unlike marriage which has no residency requirement.) Richard Socarides, who was an advisor to President Bill Clinton on gay issues, said the present inconsistencies in the law might eventually work to move the cause of same-sex marriage forward as more and more of these unions are formed. The new law in New York should only serve to speed up theprocess, as history has shown that more marriages inevitably result in more divorces.
Tax returns for same sex couples are a minefield! Tax free asset transfers under IRS Code Sec. 1041 and alimony under IRS Code Sec. 71 are fine on a state level, but, NOT, for US tax returns. Some same sex divorces, especially with children, may require divorce attorneys, CPAs, estate, and contract attorneys, in order to sort things out and keep economic damages from the split at a minimum. Until the U.S. recognizes same sex marriages the über complicated financial aspects of the divorce will only add to the emotional trauma of the divorce itself.
Every private employer in the US, will now pay $42 an employee for Federal Unemployment Tax, FUTA, on the first $7,000 of wages, instead of the prior FUTA tax of $56 per employee. This is a savings of $14 an employee. A FUTA surtax of 0.2 percentage points on the first $7,000 of wages was introduced in 1976. It expired on June 30, 2011. Employers will now pay 0.6 percent on the first $7,000 of wages for the federal unemployment tax.