Category: Tax Issues

Does Payroll Tax Holiday Create Right to Modify Child Support?

January 03, 2011 | Child Support, Legal Perspective, Tax Issues

Icon for author Brian Vertz Brian Vertz

Before it adjourned in December, the previous Congress passed a sweeping income tax reform bill designed to extend the Bush tax cuts for a couple more years. One important feature of that law, which goes into effect in January 2011, is a “payroll tax holiday.” Workers who earn wages and salaries must pay 6.2% for Social Security payroll taxes until they reach  earned income of $106,800 per year. All earned […]

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What’s the Hullabaloo about Balicki?

In Balicki v. Balicki, 2010 Pa.Super.134 (2010), the Superior Court affirmed the trial court’s decision to discount the value of an insurance business, based on the hypothetical income taxes that would be incurred by its owner upon sale of the business. The trial court’s decision was itself a reversal of the master’s report, in which the master found that the tax discount was inappropriate because the owner would not likely […]

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Alimony Tax Gross-Up Approved

August 09, 2010 | Alimony, Court Decisions, Divorce, Legal Perspective, Tax Issues

Icon for author Brian Vertz Brian Vertz

In Balicki v. Balicki, 2010 PA Super. 134 (July 30, 2010), the Superior Court considered the husband’s argument that the alimony order provided more income to his ex-wife than she could spend (as shown by her budgetary expenses). The trial court in its opinion justified the alimony award by noting that the wife would pay income tax on her alimony award, thereby reducing the after-tax dollars available to her. The […]

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Dividing CRATs and CRUTs in Divorce

January 19, 2010 | Divorce, Legal Perspective, Tax Issues

Icon for author Brian Vertz Brian Vertz

A recently-issued IRS ruling (Rev.Rul.2008-41) addressed the issue of whether a charitable remainder annuity trust (CRAT) or charitable remander unitrust (CRUT) can be divided into two equal trusts upon divorce. A charitable remainder annuity trust is a trust in which the grantor receives income in the form of an annuity payment until his or her death, after which the trust principal is donated to charity. The annuity may not be […]

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SRR Answers “Taxing” Year-End Questions

March 03, 2009 | Divorce, Legal Perspective, Tax Issues

Icon for author Brian Vertz Brian Vertz

The forensic accounting firm of Stout Risius Ross Advisors LLC has published an excellent guide to year-end tax questions that separated and divorcing spouses may have: 1.) What is my filing status for 2008? Your filing status is determined as of the last day of the calendar year. You are considered unmarried for the whole year if, on the last day of your tax year, you are unmarried or legally […]

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