REID CPAs LLP

If you’re divorcing, it’s important to review your estate plan as early as possible, for two reasons: First, you may wish to revise your plan immediately to prevent your spouse from inheriting or gaining control over your assets if you die or become incapacitated before the divorce is final. Second, although a divorce judgment or settlement automatically extinguishes certain of your former spouse’s rights, some documents must be modified to ensure that he or she doesn’t recei...ve unintended benefits. Consider revising your will and any revocable trusts to exclude your spouse. Note that, in many states, your spouse will retain elective share or community property rights to a portion of your estate until the marriage ends. But revising your will or trust will limit your spouse to the legal minimum if you die before the divorce is final. If you have irrevocable trusts, determine whether they provide for your spouse’s interest to terminate automatically upon divorce. Other actions to consider include: Changing beneficiary designations in IRAs, life insurance policies, annuities or retirement plans (note that federal law prevents you from removing your spouse as beneficiary of a retirement plan, without his or her consent, until the divorce is final), Revising payable on death (POD) or transfer on death (TOD) designations in bank or brokerage accounts, Revoking powers of attorney or health care directives naming your spouse as agent, and Establishing trusts for your minor children. (If they inherit assets from you outright, a court will likely appoint your former spouse as conservator.) Finally, bear in mind that, under the Tax Cuts and Jobs Act, any alimony paid is no longer deductible by the payer or taxable to the payee. In light of this major life event, don’t hesitate to turn to us. We can review your estate plan and recommend any revisions necessary because of the divorce. 2019 See more

Employers grapple with many competing goals when it comes to compensation and pay raises. You probably want to reward specific employees who’ve made contributions to the organization and try to ensure your salaries are in line with what competitors are paying. But you also need to maintain a level of equity with other workers’ compensation. And, of course, you’ve got to keep payroll costs in line. It’s not easy to find a sensible balance. Develop criteria Money can be a sensi...tive subject for many people. Employees often view their salaries and raises not just as a means of providing for themselves and their families, but as an indication of how the organization values their contributions. So, the ways in which you decide on, and communicate, raises and other salary adjustments can affect employee morale and performance. If you haven’t already, consider developing a standard set of criteria to determine pay raises and apply it to employees within each department or group. Among the benefits of having set criteria is that it reduces the perception of, and opportunity for, bias. Even a perception of partiality can dampen employee morale. Over time, it even may harm retention and performance. And by standardizing the criteria you use to determine raises, you’re less likely to wind up with significant variations in compensation between different groups of employees. You’re no doubt familiar with the controversies regarding pay inequities between genders and other distinctions. Standardized criteria can help ensure that, as much as possible, compensation fairly reflects performance. Focus on goals Of course, these criteria shouldn’t prevent or inhibit you from recognizing employees who’ve met or exceeded their performance objectives. Tying raises to such goals is fine if the objectives themselves are clearly communicated, measurable and challenging but within reach. Goals should be both specific to an employee’s actions and tied to broader organizational goals. For instance, a goal set for a warehouse manager could be to increase the percentage of on-time deliveries. Some organizations use raises to recognize seniority. They say experience often has some impact on the contribution an employee makes. In addition, using raises as one tool to reduce turnover often makes sense, given the expense of attracting new employees. Other organizations maintain that longevity doesn’t automatically correlate with the value an individual brings. In addition, regularly rewarding employees’ tenure can lead to bloated salaries. Many organizations look at both longevity and performance when determining raises. Keep searching Naturally, all policies on raises and compensation should comply with applicable laws and regulations. This is yet one more issue to grapple with when searching for that often-elusive balance. Please contact us for assistance. 2019 See more

Most TCJA provisions went into effect in 2018 and apply through 2025 or are permanent, but two major changes affect individuals beginning in 2019: 1) While the TCJA reduced the medical expense deduction threshold from 10% of adjusted gross income to 7.5%, the reduction applies only to 2017 and 2018. So for 2019, the threshold returns to 10%. 2) For divorce agreements executed (or, in some cases, modified) after Dec. 31, 2018, alimony payments won’t be deductible by the payer but will be excluded from the recipient’s taxable income. Contact us for details.