New regulations will make alimony payments non-taxable income for those receiving alimony payments and non-tax-deductible for those making the payments beginning January 1, 2019.
Properly executed, unmodified agreements and orders executed prior to that date will retain the deductibility and taxability, respectively.
The Basics of Alimony
Alimony is the monetary exchange of support following a separation or divorce, which is based on need. Factors such as the age of the parties, the length of the marriage, earnings of each party, and at times marital fault, are considered. Alimony is paid by the person determined to be the supporting spouse (payor) and is received by the person determined to be the dependent spouse (recipient). Both parties and their representation often negotiate the amount and duration of alimony payments; although, it can be court ordered in the case of the parties not reaching an agreement.
The Tax Cuts and Jobs Act
For years alimony payments were deductible for the payor spouse and taxable to the recipient spouse. However, the Tax Cuts and Jobs Act (TCJA), signed into law in December 2017, will repeal the alimony deduction — a statute that has been in the tax code since 1942. The argument is that policies should treat alimony like child support, which is already not tax-deductible for the payor nor taxable to the recipient. Section 11051 of TCJA states, “this section repeals the deduction for alimony or separate maintenance payments from the payor spouse and the corresponding inclusion of the payments in the gross income of the recipient spouse.”
The changes in the tax laws apply to:
- Any divorce or separation instrument executed after December 31, 2018,
- Any divorce or separation instrument executed on or prior to December 31, 2018, and modified thereafter if the modification explicitly provides that the repeal of the deduction for alimony from the payor spouse applies, as well as the corresponding repeal of inclusion of payments as income to the recipient applies,
- AND MAY APPLY to modifications to existing agreements which do not refer to the repeal. There is uncertainty here and many await guidance from the IRS.
Effects and Concerns
Currently, if the payor spouse has a gross income of $100,000, and $20,000 of that sum is paid in alimony to the recipient spouse, then he or she would have a taxable income of only $80,000. All the while, the recipient would then have to declare the $20,000 as taxable income in conjunction with their earnings. After the repeal, the payor will be taxed for the full $100,000, and the recipient will no longer have to pay taxes on the alimony.
The repeal may hurt both parties by pushing the alimony payor into a higher tax bracket who, in turn, may reduce the amount offered because of the lack of deductibility. This may reduce the bargaining power of recipient spouses who are typically in a lower tax bracket. Quite often the benefits of deduction resulted in more overall money between the parties for division. It remains to be seen if District Court judges will be inclined to grant less in alimony because the tax law change affects the spouse’s ability to pay.
The end result is that less alimony is likely to be offered due to loss of the tax deduction. Litigation of alimony cases is likely to rise.
What to Do
If you wish to maintain deductibility and can finalize your divorce and alimony claims in 2018 by separation agreement or court order you should do so. Be careful about any modifications in 2019 to any existing orders or agreements executed before December 31, 2018 for alimony as you may very likely change how both payor and recipient are taxed.
If you have questions as to how this new law affects you, call the lawyers at Perry, Bundy, Plyler and Long LLP. You can speak to one of our divorce attorneys at 704-289-2519.
The unpredictable experience of an automobile accident can leave you feeling overwhelmed. One single event has the potential to change your life. If you ever find yourself in this situation, it is important to have someone on your side.
If you have been in an accident, your priority should be taking care of yourself and seeking medical attention for any injuries. Accidents can result in a trip to the emergency room, multiple doctor’s offices, and physical therapy sessions. It is essential to look into the services of a personal injury attorney as soon as possible following an accident.
In addition, serious injuries often have an enormous emotional and financial impact on you and your family. While trying to carry out your normal responsibilities and activities, you may also have to deal with:
- body shops
- car dealers
- car rental providers
- insurance adjustors
- time missed from work
- ongoing bills
Hiring an attorney in Monroe, NC to help you navigate through your personal injury claim will add ease to this process. While an insurance adjustor may be friendly to you on the telephone, their ultimate job is to settle your claim for as little money as possible. You want an even playing field between you and your insurance company, as they have an abundance of resources and legal experts assisting them during any negotiations. In addition to paying your medical bills, you should also be compensated for pain and suffering, lost wages, and any permanent scarring or disability.
At Perry, Bundy, Plyler, & Long, LLP we know how to handle these claims. We aim to alleviate the stress of the situation, so you can focus on what is most important, your recovery. Please call one of the attorneys at Perry, Bundy, Plyler, & Long, LLP 704-289-2519 to set up a free consultation.
Do you know if you are eligible for Social Security Disability Insurance or Supplemental Security Income? If you are no longer able to work because of an injury or illness, you may be entitled to Social Security benefits.
Am I Disabled?
The Social Security Administration defines “disability” as a condition so severe it precludes a person from being able to perform a substantial amount of work for at least twelve months. A substantial amount of work, otherwise known as “substantial gainful activity”, means earning on average $1,180 or more per month or $1,970 Do you know if you are eligible for Social Security Disability Insurance or Supplemental Security Income? If you are no longer able to work because of an injury or illness, you may be entitled to Social Security benefits.per month for the blind. When determining whether your condition is disabling and thus precludes you from performing substantial gainful activity, the Social Security Administration will look at your ability to perform basic functions such as lifting, standing, walking, sitting, and remembering. The Social Security Administration will also take the following characteristics into consideration when determining whether you have the ability to perform substantial gainful activity:
- Capability to perform last job (or any past jobs within the last 15 years)
- Ability to perform alternative types of work
- Level of education
- Acquired skills
The Social Security Administration will look at the above-mentioned factors to determine whether you have the ability to work any job. If you do not have the ability to perform any substantial gainful activity, you will be found disabled.
Social Security Disability Insurance
If you are disabled, you may be entitled to Social Security Disability Insurance (SSDI). SSDI is a program for individuals with prior work history who have paid a requisite amount into the Social Security system prior to becoming disabled. The Social Security Administration reviews two facets of your work history to determine if you are eligible for benefits: your recent work and the duration of your work. Both requirements vary by age. Though the amount is less for younger applicants, most applicants are required to have worked at least five of the ten most recent years to qualify. The required duration of work varies by age and requires a higher number of years worked as an applicant ages. If you are disabled and have the requisite work history, you will receive SSDI benefits irrespective of your assets or income.
Supplemental Security Income
Supplemental Security Income (SSI) is is a need-based program for individuals who do not have the requisite work history to receive SSDI benefits. To qualify, you cannot have income or assets over a certain limit. Of course, you must also qualify as disabled under the above-discussed standards.
Filing A Social Security Claim
If you think you are disabled, you should file a claim with the Social Security Administration, either online or by visiting a local office. You should include a list of all impairments, conditions, and symptoms, along with a list of the addresses and phone numbers of all doctors, hospitals, and clinics involved in your treatment.
Appealing Disability Denials
The vast majority of applications for Social Security benefits are denied. Therefore, you will likely need to appeal the Social Security Administration’s initial decision that you are not disabled. Hiring an experienced and knowledgeable attorney to represent you in your Social Security appeal can greatly increase your odds of eventually being found disabled and receiving benefits. Your attorney will be aware of all deadlines, help you prepare your appeal, ensure the Social Security Administration has all of your records, advise you throughout the process and represent at your hearing.
If you have been denied Social Security benefits, it is important that you contact an experienced attorney today. Our team of Monroe, NC attorneys will work with you to present your Social Security appeal in a timely and persuasive manner to give you the best chance of receiving Social Security benefits. Call 704-289-2519 to speak to an attorney today.
Congratulations, you’ve started your own company! The ability to become your own boss and take control of your professional and financial future is unique and should not be taken for granted. The inclusion of partners can make the experience more satisfying because you have people sharing a common goal to support and work alongside you as you grow your business.
While added partners can bring added success, it is important, however, to have a detailed partnership agreement in place that sets out the terms of the partnership. Here are a few tips on how to create a professional working relationship that benefits you and your company.
1. Keep it professional
The media and entertainment industry often romanticize the relationships between business partners, chronicling best friends or family members’ journey from a two-person startup to a fortune 500 company, all while maintaining a close and fun relationship. While friends and family members can certainly run a successful business together, you do not want to find yourself in a situation where personal issues and emotions make it difficult for you to make business decisions, as separating business from personal matters is often very difficult.
If you go into business with a close friend or family member, it is even more important to have a solid partnership agreement. The agreement will be important and helpful in resolving conflicts, in detailing how the business will be managed, and in allocating profits and losses. It is important to establish boundaries between your personal relationship and working relationship, and having a partnership agreement will help you to do just that.
2. Talk it out (beforehand)
While it is not possible to plan for every situation imaginable, business partners can prepare for most circumstances by talking about how they would like to handle certain circumstances and memorializing their plans and agreements into a partnership agreement. You planned for the marriage and the honeymoon- you should also plan for the divorce. Establish what you will do in case there is sickness, conflict, major life events, opportunities and setbacks. You will want to leave no stone unturned to avoid having to scramble and negotiate for solutions last minute. The partnership agreement should document the outcomes of these conversations and layout an action plan for various scenarios.
3. Establish duties for each partner
The partnership agreement should be very clear about roles and responsibilities. You want to reduce the potential for conflict and stress by establishing who will be doing what for the company. For example, the partnership agreement should delegate responsibilities development, strategy, communications, IT, etc.. Once it is clear who will focus on certain aspects of the business, each partner should adhere to the established boundaries.
4. Consult a third party
When serious conflicts arise, you may want to consult a third-party consultant, a mediator or an attorney to bring an unbiased opinion into the mix. The partnership agreement should address when outside resources should be brought in to reduce internal conflict.
5. Have an exit strategy
Have a plan in place in the event that a partner wants to leave the company, passes away, or faces life events, such as divorce or bankruptcy, that could negatively impact the company. Include these provisions in the partnership agreement from the beginning. It is also important to consider what will happen to the business in case of a merger or acquisition, buy out, or simply selling to another entrepreneur. Determine how assets will be liquidated or ownership will be transferred if it becomes necessary to wind down the business.
Starting a business or adding a new partner? The lawyers at Perry, Bundy, Plyler and Long LLP can help draft and negotiate a partnership agreement that benefits both the partners and and the business alike. Give us a call at 704-289-2519 to schedule an appointment with one of our attorneys.
As parents, you want what’s best for your children and especially so in your post-separation child custody arrangements. Many parents have questions about how they can determine the best outcome for their children to live in a safe, healthy, and loving environment.
When buying or selling a home, one of the most important documents you will sign is the Offer to Purchase and Contract. This is a legally binding document that details the terms and conditions of the transaction, and also sets a fixed timeline for the closing. Often, the contract is on the bar form contract. Once this agreement is signed by the buyers and sellers, the property is considered “under contract” and the seller agrees to take the property off the market and to no longer receive offers from other prospective buyers.
It is important for both buyers and sellers to understand the content within the agreement before signing. While your real estate agent can fill in the blanks on a bar form contract, it is always a good idea for to consult a real estate attorney prior to entering any contract for the purchase or sale of real property, particularly if either party wishes to include additional terms not part of the bar form contract.
Generally, the Offer to Purchase and Contract will include the following details:
The contract will include final amount agreed upon by the buyer and seller. Occasionally, the buyer and seller can agree on certain contingences that may affect the purchase price, such as the result of inspections, appraisals, and the like. Certain amounts, such as the Earnest Money and the Due Diligence Fee, will often be paid upon signing the Agreement and will be credited to the purchase price to reduce the amount ultimately due at closing.
The Offer to Purchase and Contract also addresses the due diligence fee and the due diligence period. The due diligence fee is a negotiated amount that the buyer may pay to the seller. The due diligence period is a determined time in which the buyer is to conduct any examination or inspection of the property. Prior to the expiration of the due diligence period, the buyer can terminate the contract for any reason or no reason at all. The due diligence fee is paid directly to the seller, and essentially compensates the seller for taking their home off of the market while the buyer conducts their due diligence. Unless the seller breaches the contact, the seller keeps the due diligence fee in the event that the contract falls through.
The earnest money is a negotiated amount that a buyer pays to an escrow agent upon signing the agreement. The buyer pays the earnest money as a protection to the seller in order to display that the buyer is “in earnest” about purchasing the property. . If the buyer backs out of the contract for any reason, or for no reason at all, during the due diligence period, the escrow agent returns the earnest money to the buyer. If the contract goes through and the buyer does purchase the property, the earnest money is credited to the purchase price to reduce the amount owed by the buyer at closing.
The Offer to Purchase and Contract should also outline the seller’s representations to the buyer. These should include a representation by the seller that he or she owns the property, provide details on any homeowner’s association, make any required disclosures, and warrant that the seller can provide good title and legal access to the property.
The Offer to Purchase and Contract will also set a settlement date.. It may also include details on closing costs, and whether the seller will pay any of the buyer’s closing costs. On the settlement date, all closing documents are signed, all funds are collected from the buyer and the lender, if any. The funds are then disbursed to pay off any encumbrances on the property with the balance going to the seller. Title is transferred to the buyer by recording a deed from the seller to the buyer in the Register of Deeds in the county where the property is located.
Before signing the Offer to Purchase and Contract, or any other contract of the sale or purchase of real property, buyers and sellers must be knowledgeable of the terms and conditions that they are signing. If you need help with a contract to purchase real property, call the lawyers at Perry, Bundy, Plyer and Long at 704-289-2519 today!
It is extremely rare for parties to agree on absolutely everything throughout the divorce process. However, effective advocacy and legal strategy can make the experience easier for everyone involved. Here are a few tips on how to divide property with your spouse:
One of the many challenging aspects of a divorce is determining whether spousal support should be established. Post-separation support and alimony are utilized to help the dependent spouse maintain an accustomed standard of living.
There are a several things to consider when negotiating spousal support. Below are a few issues to keep in mind:
Congress first passed federal laws establishing child support guidelines in the 1980’s to accomplish three main goals:
- financially help children living in a single parent household;
- encourage payment of child support and
- promote consistent contact between parent and child
Today, many of those same guidelines exist in order to ensure the safety, well-being and financial upbringing of children living in single parent households. As any parent knows, paying for a child’s needs can be an expensive endeavor. While every situation is different, there are some basic principles you can use to estimate how much you should expect to pay in child support:
Get to know your local Monroe, NC attorneys at Perry, Bundy, Plyler & Long LLP.
Richard G. Long Jr. is the managing partner with Perry, Bundy, Plyer & Long, joining the firm in 1995. Mr. Long primarily practices family law, emphasizing mediation, but also practices real estate law, business law and municipal law.
Here is our interview with Richard:
What are your favorite types of cases to take?
Not every matter involving a lawyer is a case. I handle contract negotiations, real estate matters, wills, etc. While I enjoy family law cases because people really need our help, I prefer mediating family cases. Helping spouses reach an agreement that is determined by their own decisions is very satisfying to me.
What do you love about living in Union County?
Union County retains much of its rural character despite tremendous growth.
Did you always want to be a lawyer?
Actually, as a child, I wanted to be a scientist who studied space. However, I come from a family of lawyers, so it was natural for me to consider it for my career.
What is your favorite place to eat in Monroe?
There are so many restaurants in Monroe to choose from, however, I enjoy Mexican fare when I can.
What is your favorite Saturday afternoon activity?
I enjoy working in our yard, then coming in to watch college sports.
Where would you love to travel to?
I would like to travel to Canada and take the Trans-continental railroad.
Beach or mountains?
What book are you reading?
Hue- A book about Viet Nam and the Tet offensive.
Why should a client work with Perry, Bundy?
Perry, Bundy, Plyler and Long is large enough to handle most legal matters for your family’s needs, yet small enough where you are not just a client, but our friends and neighbors. We take a personal interest in all of our clients.
To schedule a consultation with Richard Long or another Perry, Bundy, Plyler & Long LLP attorney in Monroe, contact us at 704-289-2519 today.