Ask Chapin Blog
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If you’ve already filed your tax return, congratulations! You can rest easy, at least until 2017 rolls around. But if you haven’t tackled your 2015 taxes yet, you’re probably feeling some stress over your extension and the work still ahead of you.
You’re not alone. Approximately one-third of Americans wait until the last minute to complete their taxes. But working up to the deadline creates a lot of undue stress. The key to making taxes go more smoothly is to not let them become urgent. If you do, then you’ll be in a panic to get them done.
Coping with tax-season stress
The best thing you can do to mitigate tax-season stress is to start early. Tax documents arrive early in the year, which gives you plenty of time to work through your return. By preparing early, you have the chance to meet with your accountant, you have a heads up on what you might owe, and you have the time to fix any snags you might encounter.
If starting early isn’t an option, consider changing your mindset. You might not be able to control your 2015 tax situation, but there’s plenty of time to manage the 2016 one. Meet with your accountant and tax attorney now to create a plan, and by this time next year, you’ll be sitting pretty on April 17, 2017.
If you’re still tackling your return, set a firm date to get it done. Set benchmark goals as you complete the different sections of your return. When everything’s done and filed, get out and enjoy the beautiful weather, go out to dinner, or watch a movie. You’re done . . . until next year!
Think way ahead
You might not have a hard deadline for legacy planning, but creating a strategy now will help you and your beneficiaries avoid future panic. Making yearly gifts, converting traditional IRAs into Roth IRAs, and managing your investment income are just a few strategies to reduce the tax burden on your estate and your beneficiaries. Let’s have a conversation about how the estate tax might affect your assets and discover your options that minimize tax implications.
The snow may be blowing this week, but the spring construction season is right around the corner. If you’re like most general contractors, you’ll be hiring independent contractors to help you complete jobs. As a construction professional, you should not DIY with your independent contractors. Properly onboarding your contractors will keep you on the right side of the law, the IRS, and your insurance company.
Know the Difference between a Contractor and Employee
One of the more difficult things facing companies that hire independent contractors is proving contractors are independent business owners, not employees. Independent contractors are hired on a job-to-job basis and paid for each completed project. They’re free to find work with other companies. They don’t receive benefits from your company and aren’t covered by your worker’s compensation insurance. Instead, they carry their own insurance and pay self-employment tax. If you’re wondering whether your favorite contractors would actually be considered employees by the law and the IRS, check out this handy chart.
Get Policies and Contracts in Writing
Once you’ve confirmed your independent construction contractors are indeed independent, it’s time to get your business agreement in writing. Develop a written policy for your company to use when hiring independent contractors and require every independent contractor to sign a written contract for the work they will do for you. There are many technicalities, but here are a few guidelines:
- The scope of the work the independent contractor will take on and the timeframe in which it will be completed.
- How and when the contractor will be paid and for how much.
- Confidentiality, non-compete, and conflicts of interests clauses, if they apply to your work.
- Process for terminating the agreement between your company and the independent contractor.
- The insurance you require the independent contractor to hold during his or her time working for you, including general liability, property, company vehicle, and worker’s compensation for any workers your contractor may employ.
Now’s the time to get your independent contractors vetted and contracts signed. That way, you can enter the busy spring construction season knowing you and your independent contractors are covered. If you need help drafting your independent contractor policies and contracts, let’s have a conversation.
You’ve hit the gym every day since January 1 and avoided fast food and sweets like the plague. Congrats on starting your journey toward better health! Now that your good habits are locked in, it’s time to make sure you’re taken care of in the event you become seriously ill and unable to advocate for yourself at the doctor’s office.
If you suffered from an extreme medical condition that rendered you unable to express your wishes for your medical care, do you have someone you can trust to advocate on your behalf? Is that person named in writing? If not, it’s time to write your health care directive.
What Is a Health Care Directive?
A health care directive is a written document that outlines your wishes in the event that you are unable to speak on your own behalf regarding your medical care. Most directives name an agent, or person who you authorize to make health care decisions for you on your behalf. In Minnesota, your health care directive can also include your preferences for care, such as treatments, do-not-resuscitate orders, and organ and tissue donation.
Why Do I Need a Health Care Directive?
If you do not have a health care directive and you become unable to make your own health care decisions, your attending physician will have the final say in the treatment you receive. Your doctor may take into account what your loved ones believe you would have wanted, but the final decision lies with him or her, even if it goes against what you may wish for yourself. With a health care directive, you have more control over your care.
Who Can Be a Health Care Directive Agent?
Anyone over 18 can serve as your agent. You can even have two or more agents if you’d like or name alternates in case your agent is unable to serve. Most people choose family members or other loved ones to serve as their agents, but you can also name your primary physician if you provide a reason for doing so.
What Makes My Directive Official?
To be legal, your health care directive must state your name, be in writing, and be dated. You must sign the directive in the presence of a notary public or two witnesses.
How Do I Get Started?
Your first step is to talk with your estate planning attorney. Before the meeting, ask yourself these questions to help guide the conversation:
- How important is the use of life-prolonging treatment?
- How important is the use of pain control?
- To what extent are your and your family’s finances considered when making treatment decisions?
- What is an acceptable quality of life for you?
- Where do you want to spend your final days?
- Do you want to donate your organs, tissues, and/or eyes?
Estate planning attorneys like me can help you document your health care wishes. To get started, please give me a call: 952-200-9407. Let’s grab a cup of coffee to discuss this important and empowering document.
You just spent Thanksgiving with your relatives and in-laws. Now you are sending out Christmas cards and anticipating more quality family time. You likely know who you’d NEVER want to raise your kids if the worst happens to you and your spouse. But have you given thought to who WILL raise your children in the event of your death?
If not, you risk leaving the decision up to the courts. Avoiding this uncertainty is simple: Appoint a guardian for your children in your Legacy Plan, and set up a trust to support your children’s upbringing and education. I would be delighted to discuss the details with you.
Appointing a Guardian
Typically, in the event of your death, your spouse will automatically become the guardian of your children. But guardianship becomes murkier if both you and your spouse are deceased. Without a named guardian in your Legacy Plan, the State of Minnesota may determine one for you.
Appointing a guardian starts with a conversation with your spouse. Who are you both comfortable with raising your children? Does this person share your values? Does he or she have the social, emotional, and financial resources to provide for your kids? Talk to this person. Is he or she willing to serve as guardian?
Establishing a Trust
You can establish a Trust to provide for your children’s future financial needs. A Trust allows you to direct where your money goes and how it’s used. You can earmark assets to fund your children’s education and hobbies, pay for college, or fund a wedding.
Appointing a guardian for your minor children and establishing a Trust to support them are two of the most important actions you can take in making your Legacy Plan. Please give me a call: (952) 200-9407. Let’s grab a cup of coffee and have this important conversation.
Recently, a client of mine called me up to complain about his lazy brother. My client shares a cabin with his extended family, but found himself solely responsible for the difficult job of putting in and taking out the dock this season.
As he vented to me over the phone, I pulled up the LLC Operating Agreement I had created for the family cabin. I told him that I was sorry his family didn’t want to help him, but I had a silver lining he was really going to like.
When we drafted the LLC Operating Agreement, we stipulated that if one family member put in and took out the dock, he or she would get the week of July 4 at the cabin the following year. At the end of our call, my client felt much better and was looking forward to spending another wonderful year on the lake with his family.
Use an LLC to Hold Family Property
The law allows you to create an LLC, or limited liability company, for any lawful purpose, not just business ones. They are a popular choice for families to hold property—such as vacation homes—collectively. Here are just a few things an LLC can do:
- Outline a schedule so each member gets his or her fair share of time at the cabin.
- Explain who is responsible for repairs and maintenance on the property.
- Outline a plan for transferring ownership if a family member chooses to sell.
- Define a buy-out mechanism.
- Provide a plan for how to manage disputes among members.
To establish an LLC, it’s best to seek the advice of an estate planning attorney. To best serve your family, LLC documents must be detailed and thorough. I can help you understand all your options so you and your family can choose the ones that will keep all of you happy … and keep the peace.
To learn more about establishing an LLC for your family cabin, contact me today at 952-200-9407.
My work comp insurer did its annual audit, added a bunch of charges I don’t understand to my premium, and has now sent a cancellation notice. What do I do?
Your insurance company will send an adjuster to your home to view the damage and determine what needs to be repaired. Your insurer will then either admit or deny the claim. If your claim is denied, you need to consult a capable and experienced attorney.
Even if your insurance company admits your claim, it may be willing to pay only a part of your claim. No matter what the insurance company tells you, you will want to consult with a contractor of your own choosing to make the repairs. You should consult with a capable and experienced attorney if you have any questions.
Minnesota has an expanded definition of what it means to be on the job. Business travel, special errands, and even some commuting travel are covered.