FLORIDA ESTATE PLANNING AND PROBATE LAW BLOG

The Florida Estate Planning and Probate Law Blog is focused on recent federal and state case law and planning ideas.

Funding Different Types of Long-Term Care

♠ Posted by Marc J. Soss in ,,,,,,,
Even if you are currently in perfect health, there is a significant chance you will eventually require some form of long-term care as you age. While it is common to do some sort of planning for the expenses of retirement, fewer people prepare in advance for long-term care, with the result being that many people end up blindsided by the sheer amount of expenses on a month-to-month basis. The cost of care is only increasing, and current government programs will not cover all facets of long-term care. This is why it is important to begin planning for long-term care as early as possible to ensure you or an aging loved one will receive the best possible care, without having to go into debt or sacrifice your needs. Here are some ways you can begin preparing today. Be prepared to pay for the cost Education is critical when you are planning for long-term care. For instance, how much do you know about the inner workings of Medicare and Medicaid? Contrary to popular belief, Medicare does not actually provide coverage for the ‘care’ part of long-term care. In other words, while it generally will help with critical care hospital visits and prescriptions, Medicare will not cover the cost of a nursing home, senior care facility, or an untrained caregiver over an extended period of time. There are many other circumstances, as well, in which Medicare will not cover the cost of long-term care. By planning and taking action early on—for instance, like signing up for long-term care insurance when you are younger—you can save a large amount of money. Rates increase by 2 percent to 4 percent in your 50s, compared to 6 percent to 8 percent in your 60s. Starting early will allow you to find a reasonable premium that will allow you to rest easy about long-term care decades in advance. One way to pay for long-term care is to sell your home. If you’re considering this option, make sure to either get your home professionally appraised or use an online home-value estimate. You can also sell a life insurance policy for a lump sum of money. Medicaid may cover the costs of doctor visits, as well as in-home or nursing home care services—however, seniors must meet some stringent requirements to qualify, which you can learn more about here. To learn more about your options and how to overcome financial or legal headwinds you may encounter when planning for long-term care, it’s a smart idea to contact an elder law attorney. Marc J. Soss specializes in handling elder law, estate planning, and much more. Know your long-term care options Unless you begin planning now, you run the risk of being blindsided with having a large portion of the cost of long-term care fall directly on your shoulders. Most people drastically underestimate the yearly cost of long-term care. While the specific number varies depending on your location, the quality of the facility, the amenities available, the level of specialization, and so on, expect to pay around $50,000 per year for the most basic level of care. There are several major categories of long-term care, each with their own pros and cons. Home healthcare allows you or your loved one to age in place, staying in your own home, with a skilled aide or nurse coming to provide assistance with basic necessities, like getting dressed and moving around, as well as with more serious medical situations requiring specialized knowledge and experience. This is typically the least-expensive option (the hourly rate increases as the aide’s experience and training becomes more extensive). Next, there are assisted living facilities, which strike the balance between care and independence. Assisted living facilities provide observation, assistance with daily living, and easy access to healthcare professionals and emergency services. Finally, you can also choose skilled nursing homes, which offer continuous care and support for the highest price. Which option is best depends on your needs and abilities. Long-term care shouldn’t be a burden. By planning for the cost in advance, you will help make the decisions surrounding long-term care much easier on your family, should they be necessary. To learn more, contact Ted James at tjames@tedknowsmoney.com.
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Federal Court Affirms Employer Right To Require Employees To Be Vaccinated

♠ Posted by Marc J. Soss in ,,,
On June 12, 2021 a federal judge in Houston, Texas issued the first federal court decision addressing whether an employer may require its employees to be vaccinated as a condition of employment. The federal judge ruled that Houston Methodist Hospital (the “hospital”) did not violate the law by requiring, as a matter of policy, that all employees be vaccinated against COVID-19 by June 7, 2021. The court rejected multiple arguments, including that the COVID-19 vaccines currently available “are experimental and dangerous,” the injection requirement violated public policy, employees cannot be required to receive “unapproved” medicines and that “no currently-available vaccines have been fully approved by the Food and Drug Administration,” and that the hospital’s policy was “coercion.” To learn more go to www.fl-estateplanning.com.
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NEW IRS GUIDANCE ON 100% MEAL DEDUCTION

♠ Posted by Marc J. Soss in ,,
On April 8, the IRS released Notice 2021-25, which provided guidance in determining which meals may be fully deductible under the new IRS rules and which are remain subject to the fifty (50%) percent limitation. Under long-standing IRS rules, the deduction for food or beverage expenses is generally limited to fifty (50%) percent of the amount. In order to be deductible as a business meal, the food must not be lavish or extravagant or the taxpayer (or an employee of the taxpayer) must be present at the furnishing of such food or beverages. The Consolidated Appropriations Act of 2021, expanded the deduction of business meals to one hundred (100%) percent, if the food or beverages for the meal are provided by a restaurant. This expanded deduction is only allowable for amounts paid or incurred during the calendar years 2021 and 2022. The term “restaurant” is defined as “a business that prepares and sells food or beverages to retail customers for immediate consumption, regardless of whether the food or beverages are consumed on the business’ premises.” The notice also clarified whether certain employer-provided meals would qualify as restaurants under the regulations.
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THE COST OF LONG-TERM CARE IN 2020

♠ Posted by Marc J. Soss in ,,,,,
The cost of long-term care is a concern for all seniors. The annual cost continues to rise and makes it untenable for most to afford it. It is estimated that an individual turning age 65 has a seventy (70%) percent chance of needing long-term care at some point. The most expensive state for care is Alaska, while the least expensive state is Missouri. The annual Genworth study showed how Florida ranked. 2020 MEDIAN ANNUAL COSTS National Florida Nursing Home, Private Room $105,850 $117,804 Nursing Home, Semi Private $93,075 $104,025 Assisted Living $51,600 $44,400 Home Health Aide, 24/7 $209,664 $196,560 Home Health Aide, 40 hrs $49,920 $46,800 If you have not started already, it is important to plan for these expenses before your entire nest egg is expended.
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2021 Tax Information

♠ Posted by Marc J. Soss in ,,,
Although our 2020, Federal Income Taxes are not due until April 15, 2021, it is important to start planning today for 2021. The following is a list of some important tax thresholds: 2021 Annual Exclusion for Gifts In 2021, the first $15,000 of gifts to any person are excluded from tax. The exclusion is increased to $159,000 for gifts to spouses who are not citizens of the United States. 2021 Federal Income Tax Brackets For Single Individuals 10% Up to $9,950 12% $9,951 to $40,525 22% $40,526 to $86,375 24% $86,376 to $164,925 32% $164,926 to $209,425 35% $209,426 to $523,600 37% $523,601 or more For Married Individuals Filing Joint Returns 10% Up to $19,900 12% $19,901 to $81,050 22% $81,051 to $172,750 24% $172,751 to $329,850 32% $329,851 to $418,850 35% $418,851 to $628,300 37% $628,301 or more 2021 Standard Deduction Single $12,550 Married Filing Jointly $25,100 Head of Household $18,800
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2019 INCREASE IN CHARITABLE GIVING

♠ Posted by Marc J. Soss in ,,,,,,
Americans gave nearly $450 billion to charity last year, which is one of the highest amounts ever recorded. This number comes as lawmakers have been looking for ways to expand tax breaks for donors amid the coronavirus pandemic. Charitable donations rose 2.4 percent in 2019 according to an annual survey by Giving USA. Individual giving accounted for about 69% of all donations, but the biggest jump came from the generosity of corporations. In 2019, businesses gave about $21 million, an increase of 11.4% from 2018. Also, giving by foundations reached a record high of $75.7 billion. "In March, lawmakers included a measure in the coronavirus economic rescue bill that allows individuals to write off as much as $300 in donations for 2020 even off they don't itemize their taxes."Typically, deductions for charitable donations are only afforded to those who itemize their tax returns or add up all of their individual tax breaks, which is only about 10% of taxpayers.
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2020 RHODE ISLAND SALES TAX ON COMPUTER SOFTWARE AND STREAMING ENTERTAINMENT SERVICES

♠ Posted by Marc J. Soss in ,,,,
On June 24, 2020, the Governor of Rhode Island signed into law S2650 Substitute A, which expands the state’s sales tax base to computer software and specified digital products (streaming entertainment services), including digital audio-visual works, digital audio works, and digital books. The law also clarifies the definition of the “end-user” of a digital product in order to comply with the Streamlined Sales & Use Tax Agreement. The act is immediately effective. The law is designed to avoid sanctions by a state compact working toward sales tax harmonization. The tax is only on sales to end-users and is imposed regardless of whether the right to use the specified digital products is on a permanent or less than permanent basis and whether the purchaser must make continued payments for such right.
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HOME OFFICE DEDUCTION UNDER COVID-19

♠ Posted by Marc J. Soss in ,,,,
The government ordered shut down resulting from the spread of Covid-19 has resulted in an increased number of employee’s working from home. Many of these employee’s have inquired whether they can deduct expenses for their newly created home offices. The general rule is that expenses that otherwise might be deductible are disallowed with respect to a “dwelling unit” used by a taxpayer as a residence. However, expenses are allowed for a home office if “a portion of the dwelling unit” is used regularly and exclusively: (i) as a taxpayer’s principal place for any trade or business; (ii) as a place where patients, clients, or customers regularly meet or deal with a taxpayer in the normal course of business; or (iii) in the case of a separate structure not attached to the residence, in connection with a taxpayers business. Expenses attributable to business use may also be deductible if the use of the home is used regularly though not exclusively (i) for storage of inventory, product samples in a taxpayer’s trade or business or (ii) to provide licensed daycare services. The requirement that there be an “exclusive use” of a portion of the dwelling unit is satisfied only if there is no use of that portion of the dwelling at any time during the year that is not a qualifying business use. Further, incidental or occasional use does not qualify and the burden is on the taxpayer to prove that a portion of the residence has been used on a regular basis for business purposes. However, the Tax Cuts and Jobs Act of 2017 suspended the deduction for miscellaneous itemized deductions that included unreimbursed employee business expenses for tax years 2018 thru 2025. Therefore, employee’s sent home by their employers to work during the pandemic cannot deduct any of their home office expense even if they otherwise would qualify.
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STAFFORD ACT TAX RELIEF

♠ Posted by Marc J. Soss in ,,,,
On February 13, 2020, President Trump invoked the Stafford Act, and opened the door to a range of possibilities in structuring “qualified disaster mitigation” payments to employees under IRC Section 139. These payments are advantageous to both employers and employees and not subject to income taxes or payroll taxes. Yet, an employer is still allowed to claim them as a deduction. Expense reimbursement that can be considered “reasonable and necessary” as a result of the “qualified disaster” cannot simply be income replacement, such as sick, vacation, etc. The expenses you are reimbursing need to be: (i) expenses that are not otherwise covered by insurance; and (ii) “reasonably related” to personal, family, medical or housing expenses related to the “qualified disaster.” There is no stated cap or limit on the amount you can issue as tax-free reimbursement. Further, the IRS has made clear that if the reimbursement amount is “reasonable,” you do not need to require documentation to substantiate the expense from your employees. Examples include: A company sent employees to work from home with a $250 stipend for the equipment they need and a $50/month allowance for internet and phone service; employer is paying for employees’ transportation costs so they can avoid public transit systems; company issues all employees on temporary layoff a $1,000 stipend as housing assistance during that time; and a company is reimbursing hourly employees for up to $100 per day in childcare costs.
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IRS Notice 2020-18 Extends Tax Filing Deadline in 2020

♠ Posted by Marc J. Soss in ,,,,
IRS Notice 2020-18 has postponed this year's tax filing deadline to July 15, 2020. It is important to note that it extends only income tax and self-employment filings and payments and does not extend the time to file or pay employment taxes, estate taxes, gift taxes, excise taxes, information returns or any other federal tax or user fee filings. Taxpayers have until July 15, 2020, to pay income taxes without incurring penalties or interest, with no limit as to the amount of tax that may be deferred (previous IRS guidance, Notice 2020-17 limited the amount of tax that could be deferred). These postponements do not require a taxpayer to file an extension. However, if taxpayers are unable to file by July 15 they should request an extension. The IRS is encouraging taxpayers who are due a refund to go ahead and file. Refunds should arrive within 21 days of filing according to IRS.gov. The extension to July 15, 2020, also applies to Federal estimated income tax payments applied to the 2020 tax year (including payments of tax on self-employment income) normally due on April 15, 2020. However, the Notice does not provide guidance as to the June 15, 2020, estimated tax payment date. The time to respond to IRS notices also has not been extended. Taxpayers should review all tax notices and comply with the deadlines specified in the notice. Failure to do so could waive important rights such as the right to a collection due process proceeding.
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