Monthly Archives: January 2015

The Mediated Divorce

By | Divorce, Mediation | No Comments

The mediated divorce is a step up from a do-it-yourself (DIY) divorce and can be a cost-effective method for couples that already agree on most of the major aspects of their divorce — splitting marital assets, spousal support, child support, division of debts, and co-parenting arrangements following the divorce — but need someone to listen to their discussions and help them sort out a final agreement.

“For a couple that is really savvy and has documents and court forms with just a few things to hammer out, a mediated divorce can be a good fit,” Engelhardt says. “This is really for people who have finished with some of the heavy emotional stuff.”

Generally, couples do not retain attorneys for this type of divorce, but use a professional divorce mediator instead and may consult outside of mediation with lawyers or financial experts. Mediators help couples come up with a mediated settlement agreements, which can state how financial and parenting issues will be handled during and after the divorce. Mediators will meet with you and your spouse and help you figure out common ground and negotiate sticking points.

Your divorce mediator cannot provide legal advice. She can only guide you through the process of answering the necessary questions yourself. The best mediators often have years of experience and specialized family mediation training.

Pros

For couples that are able to compromise quickly and have the desire to create a healthy co-parenting relationship after their divorce, the mediated divorce can be very beneficial as it promotes compromise and gives spouses the tools and strategies to navigate future conflicts.

For couples considering a DIY divorce, opting for mediation with a neutral third-party can give them the peace of mind that there was a check and balance system in place and that their divorce is less likely to come back to bite them in the future.

“I tell people who want to go it alone that they have to be really cautious,” Hatton says. “Often, people think they know what all of their issues are, but then the years go by and there are a million things you didn’t think about when you divorced.”

Getting professional help from an attorney or a mediator, to help you better understand these big-picture, long-term issues, can save a lot of strife down the road — even for couples who are in total agreement on all of the financial, custodial and emotional issues surrounding their divorce.

Cons

If there is a power imbalance in your marriage, a mediated divorce can cause problems for the spouse who is used to giving up or giving in to their partner’s demands. For victims of domestic violence, this type of divorce can be especially problematic. Mediations are generally unstructured and not standardized, making it difficult for couples to know whether everything they need to cover has actually been addressed.

Some mediators do not draft documents and may require you to hire an attorney or document preparer.

Costs

A mediated divorce can be a true cost-saver for couples that have nailed down most of the pieces — child custody arrangements, alimony, child support and the division of assets — that typically trip up the divorce process. Remember, the fewer sticking points between you and your spouse, the faster the mediation process and the lower your costs.

– Courtesy of Wevorce, http://life.wevorce.com

Musicians Could Benefit from Simplified Home Office Deduction

By | Entertainment, Tax | No Comments

It has been reported that more than 52% of all businesses in the US now operate from home (Forbes, 10/22/13).

In light of these staggering figures, the IRS has made it simpler to report the home office deduction. While most people think a band makes its living on the road, a lot of band work can go down at home. For example, many musicians have a dedicated space where they practice their instrument in the home, or an office where all booking is handled. This could qualify as a home office!

How Does It Work?

You can still claim the “old” home office deduction by calculating certain expenses like mortgage interest or rent, utilities, etc. and multiplying the total expenses by the percentage of space utilized for your office. The record keeping requirements for this method can be burdensome.

Now the IRS has a simpler option – you can claim a standard deduction of $5 per square foot of your home used for business, up to a maximum of 300 square feet and a $1,500.00 total deduction for the year. This simplified calculation method eases the record-keeping requirements previously required to claim the deduction.

No matter which method you choose, you still must first qualify for the deduction. Despite the eased record-keeping requirement of the new method, it can have some drawbacks. For instance, your deduction could be lower under the new method. Also, any deduction amount in excess of your Gross Income cannot be carried forward under the new method.

IRS Publication 587 can help you determine if you qualify for the Home Office Deduction and decide which reporting method would be best for you. The publication can be found at: www.irs.gov/pub/irs-pdf/p587.pdf

Home office deductions could be the subject of an IRS audit, so be sure to review Publication 587 carefully or consult a tax professional before claiming the deduction.

CIRCULAR 230 DISCLOSURE: Per regulations governing practice before the Internal Revenue Service, any tax advice contained herein is not intended or written for use, and cannot be used, to avoid tax penalties that may be imposed on the taxpayer.