Case Information
At the top of the screen, you enter information relating to the case.
This information will carry to the financial form.
This screen is where you enter wages and items that are deducted from income at the top of the financial affidavit’s income and expense section.
The items on this screen vary from state to state, depending on the layout of the state’s financial affidavit.
At the top of the screen, you select which party’s information you wish to display and enter, or you may click a button to display and enter both parties simultaneously.
If you display both parties, you will see only a monthly entry for each item.
If you display only one party, you will see the option to enter weekly, monthly, or annual.
You can easily switch back and forth between the two displays, so just pick the one that is right for the entries you are making at the moment.
If you are viewing both parties, you can click the little button in the field that travels around with your cursor, and this will give you a pop-up calculator, where you can enter the number in any time period.
The software will then convert to monthly for you.
Wages
You can enter the wage amounts for any period that you like.
First enter the amount, and then select the period. If you later change the period, the amount will not change automatically.
In states where taxes appear on the financial affidavit, you will have an option to have the software calculate taxes.
It is generally a good idea to do this, as the tax calculation will be more accurate than using last year’s taxes.
If you do this, there will also be an option to use current spousal support in the tax calculation.
This will have an impact only if the spousal support is tax deductible.
In that case, you would check the box if you anticipate that the spousal support will be paid during the current year, and you wish to have the tax impact reflected in the tax calculation.
Health Insurance
When you enter health insurance, it is also important to specify the tax category.
This is so we can correctly calculate taxes.
There will be a help button with information about the various tax categories on the screen.
State Specific
Colorado
In Colorado, you may also enter schools, colleges, and camps on this screen.
You enter the total cost and the percent paid by the first party entered. The software will calculate the amount that this represents and flow those amounts for each party to the Sworn Financial Statement of each party.
Connecticut
The Connecticut screen with respect to the entry of wages and taxes is unique among the states that we support.
What is unique is that it asks the deductions from wages to be itemized on a job-by-job basis.
The software calculates total taxes, but there is no way to calculate actual taxes on a job by job basis, because the tax forms start with aggregate wage income.
If you have checked the box to have the software calculate the taxes, the tax entries in the “Totals” column will NOT be the horizontal total of the individual job entries.
The entries for each job show weekly withholding, whereas the totals in the column reflect actual taxes after refund or payment on Form 1040.
The total of the other items – health insurance, union dues, etc. – will be the horizontal total of those items.
Florida
The parent’s share of health and dental insurance may carry to either of two places on the Financial Affidavit.
It may carry as a deduction, or, it may carry as a personal expense.
You check a box at the bottom of the screen to specify which is the case.
Typically, you would specify it as a deduction if it is deducted from the paycheck.
Wage-Like Income
In this section, you enter other income that has wage-like characteristics.
Which Party
At the top of the screen, you select which party’s screen you wish to display, or you may click a button to display both parties simultaneously.
If you display both parties, you will see only a monthly entry for each item.
If you display only one party, you will see the option to enter weekly, monthly, or annual.
You can easily switch back and forth between the two displays, so pick the one that is right for the entries you are making at the moment.
You can enter the wage amounts for any period that you like.
If you change the time period after you enter the wage, the wage will not automatically adjust. Please enter the wage and time period both independently.
Weekly, Monthly, Annual
If you view both parties, please note the button that follows your cursor around and perches next to the current entry field. If you click that button, you will be able to enter an amount for any time period (weekly, annual, etc.).
“Unknown,” “To be Determined,” “H has Info,” Etc.
The same button will also allow you to enter text entries in number fields. You can enter “Unknown,” “TBD,” “H has info,” etc.
Social Security Income
To enter Social Security income that will be received upon retirement, click “more info” on the line for Social Security.
If the income is not yet being received, you enter the amount that you expect will be received when payments start.
This is different from the amount on the statement the party may have received from the Social Security administration. The amount shown on the Social Security statement may have to be increased for future years of work or anticipated increases (or decreases) in Social Security payments.
Given that this number is subject to future politics and economics, there is no sure way to know what to enter. Just make your best guess.
Child and Spousal Support
You may enter child support or spousal support of prior relationships on this screen.
You may enter child support or spousal support of the current relationship by clicking the link at the bottom of this screen.
You may also enter child and spousal support of the current relationship at the bottom of the screen where you enter child support information, in the section labeled “Support to Use ….”
Public Assistance Income
Public assistance income is not included as income for child support purposes.
However, it is entered here with other wage-like income, in order to keep similar entries in one place.
Bonuses, commissions, overtime and tips.
Bonuses, commissions, overtime and tips will be subject in the software’s calculation to both FICA and Medicare taxes, as long as the underlying wage is also subject.
You can change whether the wage is subject to these taxes on the “more info” page for the wage.
Deferred Compensation.
Deferred compensation can be thought of as income to be paid in the future.
Enter it here if you wish to think of it as a stream of income like this.
If it is occurring in the future, you can click the “more info” link, and specify just that years in which the payments will be made.
Deferred income can also be thought of as an asset.
If you think of it as an asset, you can enter it as a Cash & Investment asset.
New Spouse Income
Enter new spouse income for tax purposes only. It will not carry to the state financial affidavit or Budget Report of either party.
It will however, carry to the taxes report if the filing status is “filing joint with new spouse.”
State Specific
Florida
You may enter reimbursed expenses and in-kind payments to the extent they reduce living expenses on this screen.
This is an entry specific to Florida child support, and will not affect budgets or cash flow projections.
New Jersey
In New Jersey, you reach this screen by clicking the Income link on the left, then Wage-Like income at the top.
In New Jersey, the best way to enter this information is to click the four links at the top of the screen: Wages, Wage-like, Investments, and Business.
The data will flow from there over to the Case Information Statement income screen.
The advantage of entering data this way is that the data can then be used to calculate budgets and taxes, and for What If Analysis, as well as the Case Information Statement.
The data that you enter on those four screens is for the current year. To enter last year’s income, enter that directly on the CIS Income screen.
With respect to the next three sections of the Case Information Statement income screen — Earned Income, Year-to-Date Earned income, and Unearned Income — you have a choice whether to carry from the other four screens, or to enter it here directly.
You can specify this on a section-by-section basis.
You specify your choice by clicking the checkbox at the top of each of these sections on the CIS Income screen.
Note that if you enter numbers on the Wage-Like Income screen, those numbers will carry to the Budget Report, What If, and cash flow projections.
Income From Assets
In General
On the income and expenses screen, you can enter income from assets, and also expenses associated with debts.
You can also enter payment associated with assets, such as contributions to 401(k) accounts and life insurance premiums.
Entering Income with the Associated Asset, or Without
There are two ways to enter income from assets:
1. With an associated asset; or
2. Without an associated asset.
Please be careful not to enter any income twice.
If you enter it without the asset on an income screen, do not also enter it with the asset on the Assets & Debts screen.
If you did enter it twice, it would be double-counted on the financial affidavit, Budget Report and financial reports.
If you income from assets with the asset, there is a payoff:
When you allocate the asset to one party or the other, the software will also automatically allocate the income associated with that asset.
Suppose you have a Vanguard Mutual Fund which pays an annual dividend of $1,000.
If that Vanguard Mutual Fund is allocated to Party A, then Party A will also have the $1,000 flowing to his or her financial affidavit and Budget Report.
If you switch the allocation to Party B, then Party B will have the $1,000 flowing to his or her financial affidavit and Budget Report.
If you divide the asset 50/50, the $500 will flow to each party.
That way, you can instantly see the impact on the cash flows of the parties of dividing income-bearing assets between them.
Note that business assets are an exception to this rule. For business assets, there is a separate entry to allocate income from the business. This is because it is often the case for businesses that the ongoing business income is allocated differently than the business ownership percent.
Also please note that all of the asset types entered here may also be entered on the Assets & Debts screen. The information at the top level will differ between the two screens, but the “more info” screens for the assets are the same at each location.
When you enter income with the asset, the software assumes that all of the items you entered are equity securities, and so all the income is dividend income. You can change that on the “more info” screen.
Income Entered Without the Associated Asset
In the income section, you can enter various forms of asset-related income for each party: interest income, dividend income, etc.
This is the “quick and dirty” way of entering asset related income.
If the ownership of the underlying asset changed, this number will not change.
Business Income
You can not enter business income without creating a business asset.
But you can quicky enter business assets in the section for business income, and you can specify the value and cash flow of the business.
If you click “more info” you can enter everything about the business, including whether it qualifies as a pass-through entity.
The Net Annual Cash Flow is the net cash flow of the business. For this purpose, do not count depreciation as an expense.
The software will use this number in its tax calculations. So, effectively, the software is assuming that there is no depreciation.
Because of the current generous expensing associated with Internal Revenue Code section 179, this is generally true for most small businesses.
If depreciation is significant, you will want to override the taxable income from the business shown on Forms & Reports >View/Edit Taxes.
If you wish to enter gross income and then itemize the expenses of the business, you may do that on the “more info” screen.
You must specify the percent of cash flow that is being allocated to each party. That is how the software knows how much of the income should flow to the financial affidavit of each party.
In some states, you will see footnotes labeled “Asset” and “Income.” If you see that, then the information you enter with the Asset footnote will flow to the financial affidavit where the asset is entered, and to the Marital Property Division report. The information that you enter with the Income footnote will flow to the financial affidavit where the income flows, and to the Budget Report.
Rental Income
Every real estate property will be listed here, whether it is a rental income property or not.
That is because the software wants to give you the opportunity to specify any property as a rental income property.
If a property is not a rental income property, just ignore it when you see it in this section. As long as you do not enter any rental income, it will not be listed on the financial affidavit or anywhere else as a rental income property.
To specify a property as a rental income property, click the “more info” link for the property, and, in the section on Rental Income, click the checkbox to indicate that it is a rental income property.
Income from Investments and Accounts for Child Support
By default, all investment income counts for the child support calculation.
If you want it not to count, in some states, there is a checkbox to omit investment income for purposes of the child support guideline calculation.
If you do not see the checkbox, and you want to omit investment income for the child support calculation, then create a separate file in which the investment income is zero, and use that file for the child support calculation.
Pension and IRA/401k Income
Pension and IRA/401k income may be entered with or without an asset.
When you enter it without an asset, you specify an amount for each party.
When you enter IRA/401k income with an asset, you enter total income from the account and then specify the percent of the income that each party receives.
In the case of a pension asset, you specify the percent of ownership of the marital portion. The software then divides the income allocable to the marital portion in this percent and allocates all of the income allocable to the separate portion to the plan participant.
Debt Payments
Enter the balance in the monthly payment on each debt.
Also enter the interest rate.
If you are doing cash flow projections, the software will automatically amortize the debt.
It is also important to enter the percent of the debt that will be paid by each party.
The software will multiply the monthly payment by the percent paid by the party, and carry that amount to the financial affidavit.
For example, if there is a $3000 debt with monthly payments are $150, and the debt is being paid 50% by each party, then $75 will go to each party’s financial affidavit.
If the entry with respect to the percent paid by the party is blank, then it none of the payment will flow to the financial affidavit.
Life Insurance Premiums
Life insurance premiums may be entered either with or without the asset.
Unlike other expenses, you do not enter a total and allocate by percentage, but you enter the amount paid by each party.
This is because that is how life insurance policies tend to work. One party or the other is responsible for the premiums.
Real Estate Expenses
In this section, you can enter real estate properties that the parties own, will purchase, or live in as tenants.
For properties that are currently owned, you can indicate that they will be sold.
The properties can be partially or entirely rental income properties.
You can enter mortgages for all of these properties.
All of this is discussed on this screen below.
In general
When you first come to this screen, you will see two links at the top:
· Add real estate property
· And tenant expenses
If this is a property that is owned by a party, or a property that will be purchased in the future by a party, then click the first link, “add real estate property.”
If this is a property where the party is paying rent, click the second link, “add tenant expenses.”
Properties that are owned
When you click the link to add a real estate property, you will see a screen of key entries and real estate expenses.
You can fill in the fields in any order, and you can leave fields blank until you know the values.
For example, there is no need to specify the marital equity that will be kept by a party until later in the process.
On the other hand, the entry for who will keep the property is used to calculate the share of the expenses that are being paid by the party (see below). So if you have a guess as to who will be keeping the property, it is good to fill in that number at the outset.
Partial Ownership
If a property is owned in part by people who are not parties (a party’s parents, for example), then enter information just for the parties.
For example, suppose a property has a value of $500,000 and is 40% owned by Party A’s parents, and 60% owned by the parties.
Suppose the mortgage is $400,000, and the monthly mortgage payment is $4,200.
Enter the property as if its value were $300,000 (60% of $500,000). Enter $240,000 (60% of $400,000) as the mortgage, and 60% of $4,200 as the mortgage payment.
Enter the expenses that are paid by the parties.
For example, if the all the expenses are paid by the parties, and not the parents, enter 100% of the expenses.
But if property tax, for example is paid 40% by the parents, enter only 60% of the actual property tax.
Mortgage Information
When you enter the mortgage balance, monthly payment, and interest rate, the software will automatically calculate the deductible amount of interest.
This is a very valuable feature of the software, because the interest amount can change year to year.
If you are using an interest amount from a prior year, it will be inaccurate for the current year.
The software helps you get it right for the current year and future years.
Expenses
On the expense lines, enter the expense for the property in each category.
Then, on the right of each expense line, you enter the percent of that expense that is paid by each party.
This is different than living expenses, where you enter each party’s expense amount individually.
We think this is a better way to enter real estate expenses in particular, because it may be that the total expense is known initially, but the payment shares are negotiated later.
Initially, the software will default to assigning all of the expenses to the party that owns the property. If you have not specified what party owns the property, the software will assign 100% to one party. If you have specified a percent in which property will be divided, the software defaults that all expenses are allocated in that same way.
You can also change the default for any individual expense on the line where that expense is entered.
You may enter a footnote for each party to the right of the line.
Rental real estate
If the property is rental real estate, click the “more info” link on the first line where the property is entered. (This is the green 3-dots button in the Cloud edition.)
This will take you to the “more info” screen for the property.
In the section for “Rental Income Property,” click the box to specify that this is rental income property. Then, a section for entering rental real estate information will open up.
The rental real estate section is designed to be very flexible, allowing you to accommodate a number of different situations.
In particular, you can accommodate situations in which part of the use is personal use, such as when one room of the property is rented out, or when the property is rented out for a portion of the year.
At the bottom of the rental property information section, you will see the results for each party for the current year.
There are two “bottom line” entries here.
The first, in column (4), is net income. This is the net cash flow, and it is the line that flows to the Budget Report and the financial affidavits.
The second, in column (7), is taxable income. This is net cash flow adjusted for mortgage principal and depreciation, and is the amount of income subject to income tax in this year. This line flows to the View/Edit Taxes report.
Please be careful to enter the percent in which the net income will flow to each party. This will determine the percent of net income that carries for each party to the state’s financial affidavit, as well as the software’s Budget Report and other cash flow reports.
Rental real estate with no personal use
If the property is used 100% for income-producing rental purposes, then 100% of the mortgage will be allocated to the property. This is done by entering 100% on the line for the percent of payments allocable to the rental activity. This is the software’s default.
When you scroll down to the section on real estate expenses, you will see a checkbox that gives you an option to specify that the property is exclusively rental income property — that is, not used for personal purposes other than a de minimus amount.
If you check that box, you can itemize the rental expenses in the expense section below.
If the box is checked, then, with respect to the Budget Report, financial affidavit, and other cash flow reports, all the expenses will be totaled to a single number, and subtracted from the rental income, resulting in a single net income number.
That net income number will appear on the financial affidavit and the Budget Report as rental income.
You can see that number in column (4) of the rows of net income that appears at the bottom of the Rental Property Information section.
The expenses that you enter will not flow individually to the state financial affidavit, because they have been combined into, and already subtracted as part of, the net rental income number.
To carry them individually to the financial affidavit would be to double count them.
Note that when this box is checked, and expenses flow to the Rental Property Information section, the columns for “percent paid by” on the expense lines are ignored. Instead, the expenses are totaled, and the total is allocated in the same percent the net income is allocated.
Rental real estate with some personal use
If there is some personal use, you would check the box that says that “This property is also the owner’s residence or vacation home.”
A property could be partly used for personal purposes if it is used part of the year for personal purposes, such as a summer vacation home that is used by the parties some months and rented out some months.
It could also be used partly for personal purposes all year, such as a situation where a party rents out a room in the home, or a floor in a multi-floor unit, or (in New England especially) half of a side-by-side two family house.
In either case, the percent of the mortgage allocable to the rental income activity will be less than 100%.
Enter the percent allocable to the rental activity on the relevant line in the Rental Information Section.
Then, for the expenses that are allocable to personal use, we would enter them in the expense section, line by line.
Those expenses will flow to the financial affidavit and the Budget Report.
Note that the expenses flow to different places, depending on whether or not the property is used solely as a rental property. If it is, then the expenses are totaled and the total is subtracted from real estate income. The number that carries to financial statements is net income, which is real estate income minus the total real estate expenses. If not, then the expenses carry to the financial statements as personal real estate expenses.
If a property is used for personal purposes for part of the year, enter as personal expenses only those expenses incurred during the personal use time. For expenses such as property taxes, you allocate according to the percent of the year that the property had personal use.
If a portion of the property is rented, you typically allocate expenses such as utilities and taxes proportionally to the square footage that is rented.
Special tax rules apply to property that is rented for fewer than 14 days per year. With this very brief rental, the income is non-taxable, and you may count all of the property’s expenses as personal expenses.
What about the expenses allocable to the rental activity? Enter the total of those expenses in a single line, labeled, “Monthly rental expenses….” in the rental income section. You will see that line only if the box is checked to indicate that the rental has some personal use.
Mortgages
You can enter up to two mortgages per property in the software.
If there is a second mortgage, indicate that by checking the button at the top of the “more info” screen.
You can enter existing mortgages or new mortgages (see below).
The software asks questions about the mortgage.
These questions are asked in order to determine whether the interest on the mortgage is tax deductible.
The help buttons at each question explain how it is relevant to that determination.
Please be sure to answer the question who will pay the mortgage. The answer to this question controls how the mortgage payments flow to the financial affidavit.
Existing Mortgages
For existing mortgages, you would answer “no” to the question about whether the mortgage is a new, refinance, or buyout mortgage.
Existing mortgages are easier to enter. You just need to enter the mortgage balance, monthly payment, and interest rate.
The software will automatically calculate the tax-deductible amount of interest.
You should generally select the Statement Method for this mortgage.
However, if the mortgage is an adjustable rate mortgage or an interest-only mortgage, you would select the Detail Method.
For the Detail Method, you will have to enter more information, such as the initial mortgage balance, the date the mortgage was taken out, and so on.
Then, you can enter the adjustable rate and interest-only components by clicking the “more info” link at the bottom of the mortgage section on this screen.
New Mortgages and Refinancing Mortgages
If the mortgage is a new mortgage, refinancing, or buy-out mortgage, you would enter “yes” to the question in the mortgage section that asks about this.
For new mortgages or refinancing mortgages, you will be asked to enter all of the mortgage information, including the date of the mortgage, the initial balance, the interest rate, and the term of the mortgage.
The software will then calculate the amortization table for the mortgage.
If the mortgage is a refinancing mortgage, you will also enter the balance as of the date of the refinancing.
Buyout Mortgages
A “buyout mortgage” is a mortgage whose proceeds will be used to buy out one of the parties.
Here’s how the software works with a buyout mortgage:
You enter the total amount of the mortgage, the balance at refinancing, and the amount to be allocated to one of the parties
The software then calculates, by subtracting, the amount to be allocated to the other party.
For example, suppose Party B is being bought out with a $200,000 mortgage. Suppose the existing mortgage was $120,000. Then there is $80,000 of refinance proceeds available to be used to buy out Party B.
If you indicate that all $80,000 is going to Party B, the software will allocate $0 for Party A.
If you indicate that $50,000 is going to Party B, the software will allocate $30,000 for Party A.
If you indicate that $0 is going to Party B, the software will allocate $80,000 for Party A.
When you go to the Property Division screen, the software will automatically allocate these refinance proceeds to the parties. The remaining equity, post-refinancing, will be divided as you specify.
New or refinancing mortgages will not be reflected on the state financial affidavit, because the financial affidavit is intended to show the property as it exists at the current moment.
Sale of Real Estate
If the property is going to be sold, indicate that in the section on Basis and Sale.
Be sure to click the Worksheet button relating to the tax exemption. Based on the entries you make on that screen, the software will automatically calculate for tax purposes the amount of exclusion that will apply to the sale proceeds.
Here’s how the software handles proceeds from the sale.
Proceeds from the sale flow into the Accumulated Savings account.
Accumulated Savings is a hardcoded investment account in the software.
Positive net income at the end of each year also flows into this account.
If one of the parties buys another real estate property (see below), the proceeds from the Accumulated Savings account will automatically be used to handle the down payment on the new property.
The result of these automatic calculation is that you do not have to specify in any way that the proceeds of the prior property will be used for the new property. The software will handle that automatically by using funds from the Accumulated Savings account to fund the down payment.
Purchase of New Property
If a new property will be purchased, here is how to handle it:
1. Create a new real estate property by clicking the button at the top level to add a real estate property.
2. Click “more info” on that property (green 3-dots button in the Cloud).
3. At the top of the “more info” screen, answer “no” to the question whether the property is currently owned.
The screen will now change to give you an opportunity to specify who will be owning the new property, what the cost will be, and what the new mortgage will be.
The software will automatically calculate the down payment as the difference between the cost and the mortgage.
For example, if the new property will cost $200,000, and the mortgage will be $150,000, the software will calculate that the down payment is $200,000 – $150,000, which is $50,000.
If another property has been sold previously, the proceeds from that sale would flow into the Accumulated Savings account.
The software will then tap that Accumulated Savings account automatically to cover the down payment on the property.
You do not have to specify in any way that the proceeds of the prior property will be used for the new property. The software will do that automatically.
Living Expenses
In the Living Expenses section, click each of the triangles on left to open sections of expenses.
At the top of the screen, there are links to click to show the screen for each party individually or for both parties.
For each party individually, you will see columns for weekly, monthly and annual.
If you show both parties, you will see a column only for monthly.
At each entry, will see a little box that follows the cursor around, that you may click.
If you click the box, a window will pop up, and you may enter the amount in any time period, and the software will convert it to the appropriate time period.
Also, in the pop-up, you have an opportunity to enter “unknown,” “to be determined” etc.
Schools, colleges, camps and other major expenses
Schools, colleges, camps and other major expenses are a special kind of entry.
For these expenses, you enter the total expense, and the amount allocable to each party.
You may also enter several of these expenses, for different schools, colleges, and camps.
If you are doing cash flow projections, you would also enter a number of years that the expense will be paid.
If you click “more info,” you may specify whether the expense is an educational expense and for whom.
This specification may affect where the expense flows on the state financial affidavits.
Shared Expenses
Shared expenses are expenses for which an entire group of expenses will be allocated between the parties in a set percentage.
Typically these apply to children’s expenses, and typically they are divided 50/50.
Not every state has the opportunity to enter shared expenses, but if your state does, you will see a checkbox near the top of the screen labeled “display fields for shared expenses.”
If you check that box, you will see a new column on the screen for shared monthly expenses.
In that column, you enter the total expense in the “shared monthly expenses” box.
At the top of the screen, you will also enter the percent of shared expenses that each party will pay.
Then, the software will amount of calculate the amount of each shared expense that will be paid by each party.
For example, suppose day care, school uniforms, child’s doctor expenses, and child’s camp are going to be shared expenses.
For each of those expenses, you would enter the total amount in the Shared Monthly column.
Suppose that the shared percentage was 60% for Party A, and 40% for Party B.
Then, for each of those expenses, 60% of the expense total would be calculated as apportioned to Party A, and 40% would be calculated as apportioned to Party B.