Family Issues

The most frequently asked tax questions related to Family Issues
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Alimony

2018-Alimony Deduction

Asked Thursday, December 20, 2018 by an anonymous user
For any divorce or separation agreement executed after December 31, 2018, or executed before that date but modified after, alimony payments are not deductible by the payor spouse.

If a pre-existing agreement is modified after December 31, 2018, the new rules will only apply if the modification expressly provides that the new law should be applicable.

Correspondingly, the recipient spouse will not have to include the alimony payments received as income.
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Estate Tax

Estate Tax - Federal Exemption

Asked Wednesday, January 15, 2014 by an anonymous user
For 2016 the Federal exemption from estate taxes is $5,450,000.
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Caregivers Helping Relatives

How do you define Caregiver?

Asked Wednesday, February 15, 2012 by an anonymous user
A family Caregiver is defined as an unpaid relative that helps care for an elderly parent or relative as compared to a Professional Caregiver such as a Nurse's Aide that is paid to provide services.
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Caregivers Helping Relatives

What are some of the deductions a Caregiver can take?

Asked Wednesday, February 15, 2012 by an anonymous user
A family Caregiver may qualify for various tax deductions and credits provide they meet certain criteria. You can take a parent or qualified relative as a dependent deduction on your tax return if certain tests are met including income and support. Secondly, a family caregiver may also be able to claim medical expenses they paid on behalf of their parent or relative as an itemized deduction on Schedule A of their tax return.
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Caregivers Helping Relatives

Are there any credits available for Caregivers?

Asked Wednesday, February 15, 2012 by an anonymous user
A Caregiver that can claim a parent or relative as a dependent may also be eligible for the Child & Dependent Care Credit .
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Caregivers Helping Relatives

Are there any mistakes to avoid when doing taxes as related to Caregivers?

Asked Wednesday, February 15, 2012 by an anonymous user
Family Caregivers must make sure that the parent or relative they are claiming as a dependent deduction has not claimed themselves as a dependent on their own tax return or that no one else has claimed them. You cannot take a dependency deduction for anyone who has claimed themselves on their own tax return. Caregiver s should obtain a copy of the parent or relative’s tax return before filing their return .
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Caregivers Helping Relatives

Can both my sister and myself claim my dad as a dependent?

Asked Wednesday, February 15, 2012 by an anonymous user
In the case where there are siblings as shared caregivers of one elderly parent, , only one sibling can take the exemption for the parent. An agreement needs to be reached yearly as to which sibling will take the exemption on their return. The sibling taking the exemption will need to file Form 2120, Multiple Support Declaration, and have all of the other siblings sign the form claiming that they will not take the exemption on their own return.
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Caregivers Helping Relatives

Estate Planning Suggestions for Family Caregivers

Asked Wednesday, February 15, 2012 by an anonymous user
Many Caregivers provide support and care for elderly parents who are cash poor but house/real estate rich.Caregivers who pay for the care of their parents monthly house and living expenses and medical costs including private nurses should consider treating these payments as loans securing the loan against the parent’s home, in the event the house is sold to pay for nursing home cost , they can recoup the monies they had advanced.
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Alimony

I collect alimony payments. Can I make an IRA contribution?

Asked Sunday, January 29, 2012 by an anonymous user
Yes. Taxable alimony payments qualify as compensation for purposes of making an IRA contribution. You are subject to the same IRA contribution limitations as one who is working.
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Estate Tax

Estate Tax Rates

Asked Thursday, January 19, 2012 by an anonymous user
If Congress does not agree by the end of 2012, the estate tax is set to revert to pre-2001 levels. As of this date, estate tax rates for 2013 and beyond are set to increase to a maximum of 55% (up from 35% in 2011 and 2012), and only the first $1 million of one’s estate (down from $5.12 million in 2012 and $5 million in 2011) would be exempt.
In 2011, For an estate or gift(s) with:
Taxable income of $1 but not over $10,000 the tax is $0 plus 18 % over $0
T.I. of $100,000 but not over $150,000 the tax is $23,820 plus 30 % over $100,000
T.I. of $150,000 but not over $250,000 the tax is $38,800 plus 32 % over $150,000
T.I. of $250,000 but not over $500,000 the tax is $70,800 plus 34 % over $250,000
T.I. of $500,000 the tax is $155,800 plus 35 % over $500,000 Any gift tax that you would owe is eliminated or reduced by a tax credit. The credit against taxable gifts for 2011 and 2012 is $1,730,800 effectively exempting $5 million of taxable estates.
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