The Legal Insider
In this issue:
Obamacare and Taxes: What to Expect in 2016
Starting in April 2016, U.S. taxpayers will pay taxes for Obamacare. The biggest change is that taxpayers will need to report any months during the year 2015 where they did not have health coverage.
There are also some tax hikes, deduction limits, credits, breaks, and other changes. But most of these changes mainly affect individuals/families with high income or large business that make more than $250,000 and have 50 or more employees.
Penalties for an Individual Without Coverag
The annual fee for not having insurance in 2016 is $695 per adult, $347.50 per child, and up to $2,085 per family. It may also be 2.5% of your annual household income. The fine will always be whichever amount is greater.
To avoid the penalty, individuals must get minimum coverage and keep it throughout the year. Individuals may also get an exemption. Either way, the tax penalty is owed for each full month the individual is without coverage. However, individuals can have less than 3 months without coverage and avoid the tax penalty.
Changes for Employees
Full-time employees must be insured, either through their employer or by purchasing insurance on their own. If the employee is employed by a large company, then they will receive insurance from their employer.
Changes for Employers
For the tax year of 2015, employers with more than 50 full-time employees must provide health insurance for 95% of their full-time employees and their dependents under the age of 26. Companies with 100 or more full-time employees will now need to insure at least 95% of workers.
If the employer does not cover their workers, there is a tax penalty of $2,000 per full-time employee after the first 30 employees. Employers must offer coverage, but their employees do not need to accept it.
Obamacare and Child Support: What to Expect in 2016
Under the laws of child support, a parent must give child support for a child under the age of 18. Under Obamacare, an employee can claim a child as a dependent so long as the child is under the age of 26.
But how does this affect child support payments? The answer is that it doesn't.
Obamacare Does Not Change the Age for Child Support
Once the child reaches the age of majority, 18, a parent's obligation for child support is over. Even though Obamacare extends the age of a child's ability to be covered by a parent's insurance, it does not affect child support.
Instead, it simply gives parents the option to offer health coverage to their child beyond the age of 18. A parent, even if they are obligated to pay child support, is not obligated to list the child as a dependent for health coverage.
But the 18 year-old Needs Health Insurance
Still, the now 18 year-old child needs health insurance. They have several options: continue coverage under a parent's insurance plan, receive their own health insurance through Obamacare, receive health insurance through their college/university, or be employed full-time by a large company. If the 18 year-old child does not have health insurance, then he or she will face tax penalties.
You Do Not Have to Keep Your Child on Your Insurance
Once the parent has paid their child support obligations and the child reaches the age of majority, the parent is no longer obligated to support the child. Even though the age of coverage has been extended to 26 years, parents do not have need to keep their child on their health insurance plan.
What Kind of Bankruptcy Should I File?
Bankruptcy helps people who can no longer pay their debts get a fresh start by liquidating assets to pay their debts or by creating a repayment plan. Bankruptcy laws also protect financially troubled businesses.
Under the U.S. Bankruptcy Code, the three most common chapters of bankruptcy are Chapter 7, 13, and 11. As an individual, you may file Chapter 7 or Chapter 13 bankruptcy, depending on the specifics of your situation. Businesses may file bankruptcy under Chapter 7 to liquidate or Chapter 11 to reorganize.
Chapter 7 Bankruptcy
This is a liquidation bankruptcy. If you need an immediate discharge of certain debts, Chapter 7 may be an option for you. In most Chapter 7 cases, if the debtor is an individual, he/she receives a discharge that releases him or her from personal liability for certain dischargeable debts. Those dischargeable debts can include medical bills, utility bills, personal loans, government benefit overpayments, and credit card charges, etc. To file for Chapter 7 bankruptcy, you need to meet income requirements of the means test under the Bankruptcy Abuse and Consumer Protection Act of 2005.
The principle advantage is that the debtor comes out without any future obligations on his discharged debts. However, bankruptcy does not discharge most mortgages or liens. If you want to keep an item that serves as security for a loan, such as a car or house, you must continue these payments. If you want to discharge that car loan, you must surrender the car to the creditor that holds the lien.
Chapter 13 Bankruptcy
Chapter 13 is designed for an individual debtor who has a regular source of income. Chapter 13 is preferable to chapter 7 because the debtor can keep a valuable asset, such as a house, and can propose a "plan" to repay creditors over time, usually three to five years. Debtors who do not qualify for Chapter 7's income requirements can also use Chapter 13.
While Chapter 7 debtor receives a discharge a few months after filing, Chapter 13 debtor does not receive a discharge unless and until the debtor completes the required payments under the plan. If your plan provides for payment of 10% of the unsecured debt, the remaining 90% plus any accrued interest will be discharged or wiped out upon completion of your plan.
Chapter 11 Bankruptcy
Chapter 11 is the chapter used by large businesses to reorganize their debts and continue operating. Corporations, limited liability companies, and partnerships are not allowed to file under Chapter 13. If these entities file for relief under chapter 7, the company must end its business. Thus, Chapter 11 is the only option for these entities if they need to reorganize and continue its operations. The Chapter 11 debtor has the right to file a plan of reorganization and must provide creditors with a disclosure statement for creditors to evaluate the plan. Once the court approves the plan, the debtor can reduce its debts by repaying a portion of its obligations and discharging others.
Common White Collar Crimes
White collar crimes are nonviolent crimes committed in commercial situations by individuals, groups, or corporations for financial gain. White collar crimes cover a wide array of crimes, but they all involve crimes committed through deceit for the purpose of gaining money or other assets.
Common White Collar Crimes
Securities fraud: Securities fraud can arise when a company or organization issues a stock or other security, as well as when someone involved in the buying, selling, or trading of a security acts fraudulently. Securities fraud can occur in multiple ways.
- Securities fraud by the company - when an officer or director of a corporation doesn't accurately report the company's financial information to its shareholders.
- Insider trading - a person who is associated with a company and knows information that isn't available to the public, uses that information to make decisions about whether to buy or sell the stock before that information is disclosed to the public.
- Third party misrepresentation - when a third party gives out false information about the stock market or a particular company or industry.
Securities fraud can be punished both with civil penalties, such as fines or license restriction, as well as criminal penalties, such as fines and prison.
One famous example of this type of securities fraud was the Enron scandal, where corporate officers failed to report the company's expenses, causing profits to appear larger than they were in reality. Former Enron Chief Executive Officer Jeffrey K. Skilling was sentenced 24 years (later resentenced to 168 months) of prison on conspiracy, securities fraud, and other charges related to the collapse of Enron Corporation and was fined $42 million toward restitution for the victims.
Embezzlement: Embezzlement occurs when one who has been entrusted with funds steals them for his own benefit. The return of embezzled money or property does not release an accused from criminal liability. The conviction of embezzlement may result in imprisonment, probation or parole, significant fines, and loss of occupational or professional licensing. The defendant charged with embezzlement can raise defenses such as insufficient evidence, duress, entrapment, and absence of intent to commit a crime.
Cybercrime: Cybercrime is a crime that is committed against individuals or groups of individuals with a criminal motive to intentionally harm the reputation of the victim or cause physical or mental harm, or loss, to the victim directly or indirectly, using modern telecommunication networks such as Internet. Issues surrounding these types of crimes have become high-profile, such as hacking, copyright infringement, and child pornography.
Albert Gonzalezan case - Albert Gonzalezan is an American computer hacker and computer criminal who was sentenced to 20 years in prison for leading a gang of cyber thieves who stole more than 90 million credit and debit card numbers from retailers.
Money laundering: Money laundering is the process by which illegally obtained cash is made to appear as if it has been obtained by legal means. The funds are moved into valid accounts or businesses in order to hide or disguise the financial trail that leads back to the criminal activity. Money laundering convictions typically result in fines, prison, probation, or a combination of penalties. While misdemeanor convictions typically allow for fines up to no more than a few thousand dollars, a federal conviction for money laundering can result in fines of up to $500,000 or double the amount of money that was laundered, whichever is greater.