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What You Need to Know About IRS Form 8379 – Injured Spouse Allocation

By Amanda L. Richter, CPA

Internal Revenue Service (“IRS”) Form 8379 Injured Spouse Allocation is a form that can be submitted with the jointly filed individual tax return when it is anticipated that the refund will be used to offset past-due obligations of the other spouse. By filing this form, the injured spouse (non- debtor spouse) is requesting the IRS to not have his/her share of the refund applied to the other spouse’s debt obligation.

When married couples file a joint individual tax return, under the principle law of joint and several liability, both the taxpayer and spouse are held responsible for the tax liability and certain debts. Some examples of debts susceptible to being seized by the IRS are:

  • Federal income taxes
  • State income taxes
  • Unpaid child support
  • Delinquent student loan debt
  • Unpaid spousal support
  • State unemployment compensation

This form can be filed with the tax return or filed separately. If Form 8379 is filed separately, it is important to remember to attach a copy of all Forms W-2 and 1099’s that report Federal withholding. If not attached this can result in delays for the IRS to process the form.

The due date for filing Form 8379 is three years from the due date of the original tax return (April 15th) or two years from the date the tax refund was applied to the debt obligation. This form must also be filed each year the non-debtor spouse is requesting relief.

If you have any questions regarding this information or belief that you may be entitled to an injured spouse allocation, please contact our office at 757-399-7506 to further discuss your situation.

Ask Kit Kat: Forward Food Team

Hook Law Center: Kit Kat, what is the Forward Food Team, and how does it help animals?

Kit Kat: Well, the Forward Food Team is a project of the Humane Society of the United States (HSUS). It fosters training in preparing food which is meatless, yet tasty. A prime example is its partnership with the U.S. Military. A sweet potato and black bean burrito recipe created by the HSUS has been approved by the Department of Defense (DOD) to be served on military bases. This is a huge achievement for HSUS, because DOD has some very strict nutrition regulations. HSUS also has developed recipes for lasagna and tacos using a plant-based meat substitute. Soldiers are apparently enjoying the food. 90% have reacted positively to the menu changes. Stefanie Heath, a HSUS food and nutrition specialist, says, “As long as it tastes good, they’ll eat it.” In addition, military chefs are being trained in plant-based nutrition on several bases and at Fort Lee, an Army base in Virginia, which is an important culinary training center. Gradually, there will be more and more plant-based options on the menu.

HSUS’ Food Forward also partners with universities, K-12 school districts, hospitals, and other groups to include plant-based menu options. In all, 2000 chefs have been trained nationwide. That translates into 10.3 million animal lives saved. Kudos to HSUS to all the institutions who are willing to experiment with their menu options to provide tasty food which is at the same time animal-friendly. (Kelly L. Williams, “Meatless in the mess hall,” All Animals, March/April/May 2019, p. 11)

Posted on Thursday, May 16th, 2019. Filed under Senior Law News.

Deciding When to Take Social Security Benefits

By Jennifer Rossettini, CFP®

In a previous newsletter article, I mentioned that choosing the right Social Security claiming strategy could increase your retirement income by as much as 9%.  This article will discuss the simpler concept of just choosing when to start taking Social Security benefits.  The more complicated claiming strategies will be saved for a future article.

Most Americans know that they can begin taking Social Security benefits as early as age 62, however, nearly 40% of Social Security beneficiaries do not realize that if they claim benefits before their full retirement age, they will receive a permanent reduction in benefits.  Some beneficiaries believe that, if they take their benefit early at 62, the benefit will increase at full retirement age. This is not the case.

The first thing to know when making your decision is what your full retirement age is.  If you were born after 1960, your full retirement age is 67.  If you were born before 1960, you can find your full retirement age below:

The next thing you need to know is how much you lose by claiming benefits early and how much you gain by waiting until sometime after your full retirement age.  The reduction in benefit amount is equal to five-ninths of 1% for each of the 36 months immediately preceding your full retirement age, plus an additional five-twelfths of 1% for each month before that. The increase in benefit amount if you wait to claim benefits until after your full retirement age is two-thirds of 1% for each month you delay, up until age 70 when the benefit amount reaches its maximum.

While waiting to take benefits may seem like a no-brainer, you will also have to consider the fact that you will be missing years’ worth of benefits and calculate your “break-even point” – the age at which the sum of your higher benefits adds up to the amount you missed out on by claiming late.  If you expect to live after your break-even age, then you will be wise to delay taking benefits until your full retirement age as long as it is financially feasible for you to wait.

The following chart shows the reduction or increase in benefits compared with a full retirement age of 67, based on the age at which you claim benefits. It also shows the number of years you would need to receive benefits to break even, compared with claiming at age 62. It is based on the average monthly benefit of $1,404 at full retirement age.[1]

You can visit www.ssa.gov/myaccount/ to find out what your projected retirement benefits will be at your full retirement age, age 62 and age 70.  Based on your expected benefit at full retirement age, you can use the formulas described above to determine what your benefits will look like in the year you choose to claim benefits, and you can also calculate your break-even point.

Of course, determining when to begin taking Social Security benefits is just one piece of a very large and complex puzzle.  Every person has a unique situation affecting their retirement decisions, so general guidelines are meant to be just that – general.  We recommend that you consult with an advisor who can take a holistic look at your goals and resources to determine a retirement strategy and the Social Security claiming strategy that is right for you.


[1] https://www.fool.com/investing/2018/01/16/the-1-chart-you-need-to-decide-when-to-take-social.aspx

Ask Kit Kat: Pet Allergies

Hook Law Center: Kit Kat, what is the best way to handle pet allergies?

Kat Kat: Well, I suppose the simplest way is to not adopt a pet in the first place, if you know you have pet allergies. However, many people are not satisfied with that response, so they go ahead and deal with the allergy, rather than denying themselves the pleasure of a pet. Fortunately, there are degrees of being allergic to pets, so some with mild allergies can, with some precautions and medications, make it work. However, those with severe allergies should not probably not take the risk. If pet fur sends you into an asthma attack and to the emergency room, then perhaps you can satisfy your desire to interact with pets through volunteering in fundraisers for pets or by becoming a member of groups such as the US Humane Society or the ASPCA.

If you have decided to have a pet despite an allergy, Kenneth Mendez, chief executive of the nonprofit Asthma and Allergy Foundation of America (AAFA), recommends keeping “pets out of the bedroom, avoid carpets in the home, and use products certified as asthma and allergy friendly.” Olivia Lanes of Pittsburgh, PA is one such person who plunged ahead with pet ownership despite her allergy. She has 2 cats—Cupcake and Sophie, as well as a dog named Nova. She sneezes a lot and often has congestion, but she wouldn’t give up her pets for anything. Tracy Spiering has a 20-year old cat named Oatmeal Cookie, and 2 other cats. She requires bi-monthly shots to keep her allergies in check, but to her, giving her cats away is not an option. “It would be like giving away your kid.”

Even though some pets cause fewer allergic reactions than others, Mr. Mendez of the AAFA says there’s no such thing as a 100 % hypoallergenic animal. Another suggestion by an American Kennel Club spokesperson is to try out a pet by interacting with the specific pet for a few times to see if they cause an allergic reaction. Ashok Wahi of Basking Ridge, NJ has developed a non-prescription gel called NasalGuard which sells for $14.85. It can be applied to the nasal passages, and helps reduce allergic reactions. He should know. He developed it for his daughter, so she could keep her cat Ebony.

In summary, the decision to proceed with pet ownership despite an allergy is an individual one. Don’t feel guilty if you decide it just won’t work for you. There are other ways to support animal welfare. (Khadeeja Saafdar, “My Cat Allergy Is Killing Me, but Cupcake Stays,” The Wall Street Journal, March 28, 2019)

Posted on Monday, May 13th, 2019. Filed under Senior Law News.

HUD Releases ABLE Account Guidance

By Shannon Laymon-Pecoraro, Esq.

In December 2014, the Achieving Better Life Experience Act (ABLE) was signed into law, allowing persons with a disability onset prior to age 26 to establish tax-advantaged savings accounts. ABLE was designed to promote the health, independence, and quality of life of individuals with disabilities by allowing families to fund an account in which such an individual can secure funding for disability-related expenses. Similar to a special needs trust, the individual with the disability will have a beneficial interest, and the purpose is to supplement and not supplant other benefits. A qualified disability expense is defined as “any expenses related to the eligible individual’s blindness or disability which are made for the benefit of an eligible individual who is the designated beneficiary, including the following expenses: education, housing, transportation, employment training and support, assistive technology and personal support services, health, prevention and wellness, financial management and administrative services, legal fees, expenses for oversight and monitoring, funeral and burial expenses, and other expenses, which are approved by the Secretary .” While the treatment of ABLE accounts for the Social Security and Medicaid programs was established with the promulgation of ABLE, other means-tested benefits programs needed to clarify how they would treat ABLE accounts.

Many people with disabilities rely on assistance received through the U.S. Department of Housing and Urban Development (HUD) for housing. This assistance is most frequently received through public housing or rental assistance programs. As a general rule, eligibility is based on annual gross income, with established income limits based on area and family size. The individual receiving housing assistance will be responsible for rent, which is set at the highest of 30% of the monthly adjusted income, 10% of monthly gross income, welfare rent, or a $25-$50 minimum rent set by HUD. In calculating a household’s income, HUD will impute income to assets at the higher of actual income or calculate income from the asset based on the passbook savings rate, which is currently .06%.

HUD recently released guidance for the treatment of ABLE accounts for HUD assistance programs, clarifying that HUD will disregard amounts held in an ABLE accounts. In doing so, HUD states that under ABLE legislation, the account balance is specifically disregarded when determining an individual’s eligibility for federal means-tested programs, and that ABLE exclusion applies to HUD programs in determining a family’s income. As a result, the balance of an ABLE account will be excluded in the household’s assets, and there will be no actual or imputed income to such an account. Further, distributions from the ABLE account will not be treated as income. This favorable treatment is, however, not without limitations since HUD will continue to treat all wage income received as income, regardless of whether the income is paid into an ABLE account.

Ask Kit Kat: Tail-Tied Squirrels

Hook Law Center: Kit Kat, what can you tell us about the baby squirrels who got their tails tied together when they were in their nest?

Kit Kat: Well, this is almost unbelievable, but it really did happen. The squirrels in question were 5 baby Eastern gray squirrels. Their nest or drey was inside a tree in Milwaukee, Wisconsin. In the confined space of the nest, and with the fine hair of the babies’ tails coupled with the grasses the mother squirrel had used to line the nest, the babies’ tails became a gnarled mess. Someone rescued them and brought them into the Wisconsin Humane Society. Scott Diehl, Wildlife Director, was charged with untangling them. They resembled a star with 5 points that were pulling in all different directions. They were quite agitated, as one might expect. They had to be sedated using a tiny amount of ketamine and xylazine. Once that was done, he placed them on a heating pad. Then he set to the task of untangling them using a tiny, sharp-pointed scissors. In about 20 minutes, he got the job done. He said, “It was like untangling a ball of Christmas lights.” Because the tips of the tails had been deprived of circulation, 3 of the little ones lost a portion of their tails.

In another state (Nebraska), a similar situation played out. This time there were 6 tangled baby squirrels. Laura Stastny, Executive Director of Nebraska Wildlife Rehab, worked by herself. It was night, and she could not locate a veterinarian to do the sedation, so she wrapped them in a towel to keep movement to a minimum. She said, “I had them wrapped like a squirrel burrito.” It took her 90 minutes. 5 of the 6 squirrels ended up losing part of their tails, too. But, that’s not really a problem—tails are not essential.

Somehow, both stories got publicity through the Associated Press, and news of their feats even reached Europe! The important thing is that the tiny babies were relieved of their suffering. As Scott Diehl said, “For us, it all goes back to our mission. The mission of the Wisconsin Humane Society is to build a community that values animals and treats them with respect and kindness.” (John Kelly, “What do you do when five baby squirrels accidentally tie their tails together?” The Washington Post (Local Perspective), April 17, 2019)

Posted on Monday, May 6th, 2019. Filed under Senior Law News.
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