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Financial Check-Up (Part 3 of 4)

At the turn of the New Year we posted the first two of four interviews with CPA James Cagle from Allegent Group in Woodland Hills.  Now, with tax day literally knocking at the backdoor, we present Part 3 in this excellent series.

What is the proper care and feeding of a CPA?  In other words, how can you be a better client?

For more information about Mr. Cagle and Allegent Group, click HERE.

Like what you heard? Subscribe to Ron and Robert on Divorce on iTunes.

Missed the first two interviews?  Click HERE for Part 1 and click HERE for Part 2.

Financial Check-Up (Part 2 of 4)

Jim Cagle is a CPA with Allegent Group in Woodland Hills.  He has twenty-five years of experience in taxation, business management and directing audits, reviews and compilations with an eye towards measuring and improving the health of business.  Jim has particular expertise in real estate, entertainment, and photo finishing industries.

In honor of the new tax season, Ron and Robert have conducted a four-part interview with Mr. Cagle. Last week they left off talking about the difference between a tax credit and a tax deduction.  In this second interview we’ll find out whether or not childcare expenses are a tax deduction, if there is a difference between childcare expenses and dependent-care expenses, and what kind of expenses qualify as tax credits.

Like what you heard? Subscribe to Ron and Robert on Divorce on iTunes.

Missed last week? Click HERE to listen to it now.

Time to Tattle on Crooked Spouses

Hi everybody,

It’s tax time for us accountants, but that is not what this post is about – well, not exactly.  Actually, it’s to tattle on the law abiding (and crooked) spouses and apprise family law professionals of three income tax changes coming in 2011 that can affect spousal support and estate planning (aka dying expectations).

1.     Depreciation Expense – It’s possible for businesses to buy and deduct up to $125,000 of the cost of business property (furniture, fixtures and equipment).  Yes, there are some phaseout limitations, but it’s worth knowing about this IRS rule.  Why?  Haven’t you ever questioned the cause for that dip in earnings for that business owner spouse?  Most of us look at the obvious answer– unrecorded cash.  But maybe you should look below the top line and peek at the purchase depreciation expense.  Some of it might be added back and included in cash flow, which in turn will increase income available for support to that giving spouse.

2.     Social Security Withholding – Speaking of support, for 2011 only, the legislation reduced the rate for the Social Security portion of payroll taxes to 10.4% by reducing the employee rate from 6.2% to 4.2% (the employer’s portion remains at 6.2%).  This translates to hundreds of dollars for each of your clients to use and spend on their support payments.

3.     Estate Taxes – The government reinstated the estate tax, with an estate tax rate of 35% for estates over $5 million (adjusted for inflation after 2011).  Your estate is not tax free to entitled children or heirs as it was in 2010, but it’s still cheaper to die now than it was only a few years ago.

With all this good tax news, I hope you all make lots of money and I wish you all Happy Holidays and a kind and healthy New Year.

Steven B. Garelick, CPA/ABV/CFF, CVA, CFS
MEDIATOR, COLLABORATIVE
email: SBGarelickCPA@gmail.com
tel (818) 601-4707 <<>> (626) 441-1040
fax (818) 884-2641 <<>> (626) 441-1090*

*Post updated to reflect Mr. Garelick’s new contact information.