Why is the software’s tax calculation different from what I see on the pay stub?
The software calculates federal income tax, after accounting for all deductions and credits, using actual current numbers. The pay stub can be very different for a number of reasons: 1. Withholding. Employees can control the withholding through their W-4 selections. They can specify fewer or more exemptions than are likely, thus decreasing or increasing their […]
Why are the mortgage (and other expenses) not showing up on the financial affidavit or Budget Report?
Most likely, the reason is that the property has been indicated to be a rental income property. You can see this by looking on the "more info" screen for the real estate property, and see if the question shown below is answered "Yes." In this case, by default, 100% of the mortgage is subtracted from […]
How do I enter rent for a party who is paying rent?
Question: How do I enter rent for a party who is paying rent? Client Info > Income & Expenses > Real Estate Expenses > Add tenant expenses.
Can a party who does not live in the marital residence claim the mortgage deduction for it?
In general, a party must live in a residence in order to claim the mortgage deduction for it. For more information, see IRS publications 504 and 936. In Publication 936, search for the definition of "qualified home." An exception may apply if the title is in joint names and the payer is obligated to pay […]
How can I find the present value (PV) for spousal support (the lump sum buyout amount)?
There are two ways to get the present value calculation: (1) If you have already entered the parties’ income and expenses into the software; or (2) If you have not. We will describe each of these approaches. 1. If you have already entered the parties’ income and expenses. Go to where you enter the spousal […]
How can I implement a spousal support lump sum payment in Family Law Software?
You can follow these steps to implement the alimony present value (lump sum) in a software scenario. 1. Save As. Save the file under a new name for this scenario. Click Files tab > Save As. 2. Find the lump sum (present value) amount. It is at the bottom of the "more info" screen for […]
My spousal support present value calculation does not match yours. Why not?
Most likely, it is because we are taking account of taxes on the income earned on the spousal support payments. A financially-equivalent way of saying this is that we are using an after-tax interest rate. The following example will illustrate both perspectives. Consider the following situation:Spousal Support Payment: $15,000/month for 120 monthsPre-tax discount rate (e.g., […]
How can we negotiate divorced spouse benefits under current Social Security rules?
Under Social Security rules as amended in November, 2015, a divorced spouse may not claim divorced spouse benefits unless the worker spouse is also claiming benefits. (The divorced spouse benefit is 50% of the worker spouse’s benefit, and applies only if the parties have been married for 10 years or more, the divorced spouse is […]
How can I represent a loan from a 401k that is being paid back?
Here is how to represent an 401(k) loan repayment. 1. Enter the 401(k) balance as the current balance (as reduced by the loan). 2. Add a footnote to indicate that there is a loan outstanding from the 401(k). 3. Enter the repayments as nondeductible contributions to the 401(k). To do this, go to the “more […]
Why do the IRA distributions seem too low for awhile, then suddenly jump up?
This can happen if you specify that the software should use required minimum distributions (which is the default mode of calculating distributions), but you start distributions before age 70. The IRS requires that distributions start at age 70 1/2, but it does not provide any definitive method for calculating "required minimum" distributions before that age. […]