The Ohio version of Divorce Planner
calculates Ohio guideline child support and prepares Ohio child support
worksheets (Court format) for sole and split custody. Input is entered
(See Tour of Divorce Planner) and then all analysis is performed through a
single computer screen which allows "what-if" analysis. Different
scenarios of support can be posted into the summary report of support cases
directly from the analysis screen.
The user enters a simple set of facts with
easy-to-use menus. The software will then use this information to calculate
Ohio support, calculate all taxes, and generate 15 output reports based on a
single set of data. The user can then do "what-if" analysis from the
unique, single analysis screen in which input can be changed and resulting
after-tax figures can be instantly viewed. Alimony analysis is simple
because you see the results of different alimony amounts on a single
screen and taxes are complete and accurate.
Creating Report of Different Support
Alternatives
You use the Analysis Screen to review different
support alternatives (add alimony, change who claims the kids, create
family support - no child support etc.). You can then create a report with
relevant support alternatives displayed side-by-side for use with clients
and Courts. When support alternatives are created and posted, the user will
then print the desired output reports. After-tax cash reports are
available in detail or highlights formats. This Summary of Support
Alternatives is not restricted to different alimony amounts - any variable
can be changed allowing quick examination of the impact of claiming child
dependency exemptions or family support (all alimony and no child
support). A separate report allows for instant review of 3 alimony levels
set up in a side-by-side report.
Output reports can be exported into Word for
additional editing.
Online help answers questions on divorce taxes
and guideline child support.
Tax calculations are very accurate and software
automatically calculates the federal Alternative Minimum Tax (AMT). The AMT
is now very important in many high income divorce cases in that this
"hidden tax" may significantly erode the expected tax savings in alimony
cases from individuals being in different tax brackets.
Problems with Alimony in higher income
cases
Ohio practitioners are going to be seeing some very counter
intuitive after-tax figures in higher income alimony cases (income range
for payor from $200,000 to $500,000. The tax law changes of 2003 are going
impact many Ohio divorces in that the Alternative Minimum Tax (AMT) is going
to be a factor by reducing or totally eliminating the favorable tax impact
of alimony from different tax brackets. An annual alimony amount of
$50,000 might have been expected to create joint tax savings from
different tax brackets of $5,000 ($50,000 times 10% tax bracket
difference) might now create only $2,000 of tax savings. Alimony may not
be worth very much in some high income cases because of the Alternative
Minimum Tax which is greater in states like OH with high state and local
tax rates. FinPlan software automatically calculates the Alternative
Minimum Tax so you will always be aware if the AMT is eroding the value of
alimony in a divorce.
Posting Different Tax
Scenarios
5 different tax scenarios can be posted in a
side-by-side comparative report making evaluation of the timing of divorce
(this year vs. next year) very simple. A Married, Joint tax calculation is
automatically prepared based on your case facts for the two individuals.
FinPlan Divorce Planner's Unique Capabilities to Keep You from
Making Mistakes
FinPlan is the only family law software that will alert you before you make mistakes. You will be informed that
alimony in lower income divorces may actually increase the joint taxes
(from loss of Earned Income Credit) so you instantly know when NOT to use
alimony (you can use non-taxable spousal support). You can instantly see
the tax savings from either parent claiming the child dependency exemption
and under 17 tax credit. You instantly know if the AMT is impacting your
case. FinPlan doesn't just calculate numbers - it interprets numbers to show
divorce professionals how to use taxes to increase the total after-tax
cash available to the parties. Lower taxes equate to more total cash so
there is more to share. FinPlan software has been showing family lawyers,
mediators and financial professionals how to maximize cash in a divorce
for over 16 years. Simply stated, FinPlan has a proven track record and several
thousand satisfied customers all across the country.
Several Ohio specific output reports are shown below.
You need to have Adobe Acrobat Reader to view these reports.
~ Your Ohio Guideline Child
Support Software May Be WRONG in Some Low Income Cases ~
FinPlan Software is ALWAYS Correct and After-Tax
Cash Numbers Are Instantly Calculated
Problem: Some Ohio Child Support software programs
assume that child care credits can always be used when, in reality, low
income individuals may not pay enough tax to use the child care credit.
The error in the child support software is the inability to identify
when a correctly calculated child care credit cannot be used due to low
taxes of an individual (Child Care Credit is a nonrefundable credit and
there must be a tax liability to use this credit). This results in a
higher child care credit for Ohio support which will lower the guideline
child support amount and hurt a mother who is low income and cannot use
the child care credits (both Federal & Ohio). FinPlan software correctly
adjusts the child care credit amount used in calculating Ohio support, but
allows you to change it if you want to. FinPlan can do this because it
correctly calculates all taxes.
The Federal Child Care Credit was increased in 2003 and the percentages and income ranges were made more generous. This has had an impact on Ohio guideline child support and in low income cases (custodial parent making under $25,000), child support being calculated by other software applications is incorrect when there are two children and there are child care costs.
The error in other software may be very significant. To illustrate, assume a case in which father makes $40,000 and there are 2 children under age 13 and $6,000 in child care expenses (allowed Federal limit for child care credit). Ohio guideline child support under different income levels for the mother is shown below:
| Income of Mother |
FinPlan Child Spt |
Other Programs |
Child Support Understated |
| $19,500/Yr |
$960/Mo |
$809/Mo |
($151) |
| 20,000 |
952 |
805 |
(147) |
| 24,000 |
894 |
790 |
(104) |
Errors in guideline child support of up to $151 per month in a very simple case are something that practitioners will want to avoid if they understand what is happening. The new federal child care credit at $20,000 of income is $1,920, but low income individuals cannot use this credit because their tax is too low. Ohio child care credits are based on the potential federal credit (ignoring any disallowance based on the federal tax liability) which may be quite high in a low income case with substantial child care costs. The Ohio credit may also be too high based on the Ohio tax liability of the low income person. Other software applications have no way to recognize this and their child support numbers may be materially understated, because they assume that the full credit is always used. You should be expecting different child support numbers from other software and you will need to be able to explain why these other programs are incorrect in low income cases compared to FinPlan numbers.
Run a case where the father makes $40,000 and the
mother makes $19,500 and there are 3 young children with child care costs
of $4,800 per year and a local tax rate of 2%. Child support may be
understated by over $128 per month in some other software applications.
FinPlan shows Ohio guideline support at $12,007 per year and other software
will compute support at a much lower number ($11,879). The solution is to
transfer some or all of the child dependency exemptions to the father so
that tax savings from the exemptions and under 17 credit are increased and
mother can make use of the child care credit. Child support must be
increased over guideline amounts to share the tax savings and make the
settlement fair to both parties.
FinPlan software is designed to instantly show you
these solutions and taxes do matter when Ohio guideline child support is
being calculated.
Several Ohio reports are shown below. If you do not
have Acrobat Reader you can download a free copy
at Adobe's Acrobat web site.