BARTHOLOMEW, WASZNICKY & MOLINARO LLP : THE SACRAMENTO REGION’S LARGEST FAMILY LAW FIRM
WHAT’S NEW @ BWM
POTENTIAL TAX TRAPS
IN SEPARATION OR DIVORCE—PART 1
By Beverly Brautigam, CPA, and Hal Bartholomew, CFLS
The following is an excerpt from an article written by the co-authors and published recently.
Part 2 will appear in the law firm’s summer newsletter edition.
Are you separated from your spouse or thinking of dissolving your marriage? Over half of all California marriages end in
divorce. The statistic is even higher for second marriages.
You may think that separating from your spouse or getting a divorce isn’t any of Uncle Sam’s business, but either of these
changes could affect your tax picture.
Your filing status for your returns is determined by your marital status on December 31 of the tax year. The filing status
options are: single, married filing a joint return, married filing a separate return, head of household and qualifying
widow(er) with dependent child.
Consideration should be given to how tax returns will be filed. As each spouse is jointly and severally liable for any taxes
and interest and/or penalties on a joint return, it may be wise to file separate returns. If separate returns are used in a
community-property jurisdiction, as in California, the general rule is that each spouse must report one-half of the
community income and all of his or her separate income. However, the combined tax from two married-filing separate
returns is generally greater than the liability for a joint return. It is best to have your specific situation evaluated.
If you choose to file separate returns, any withholding, estimated tax payments made and/or applied overpayments during
the year can be allocated between spouses by writing to the IRS or the Franchise Tax Board detailing how the payments
should be applied. The letter should be signed by both spouses.
If there are children of the marriage and the children qualify as dependents, generally, the parent who has custody of a
child or children for the greater portion of the year is entitled to the dependency exemption. For 2004, an exemption is
worth $3,100 on the federal return and $263 on the California return. However, these exemptions are phased out when
a taxpayer’s adjusted gross income exceeds a certain amount depending on filing status. Be sure that you can benefit from
the exemption before arguing over it. The custodial parent can waive the dependency exemption to the noncustodial
parent in writing by completing Form 8332.
Taxpayers with a son or daughter, grandchild, stepchild or foster child who is a U.S. citizen, national or legal resident, is
under the age of 17 and can be claimed as the taxpayer’s dependent can claim a credit of $1,000 per child in 2004. The
credit is phased out at certain income levels depending on filing status. There is a complex formula for determining the
limitations on the amount of the credit and its partial refundability against payroll taxes for taxpayers with three or more
The custodial parent is allowed a credit for child-care expenses incurred for children who are under the age of 13 and who
are dependents of the taxpayer. The amount of employment-related expenses eligible for the federal credit is $3,000
($6,000 for two or more children). Depending on the taxpayer’s adjusted gross income, the percentage of employment-
related expenses that make up the amount of the credit varies from 20 percent to 35 percent. A divorced or legally
separated taxpayer having custody of a child who qualifies them for the credit is entitled to it even though he or she has
released the right to a dependency exemption by completing Form 8332.
POTENTIAL TAX TRAPS continued inside
Divorce & Mediation
The LEGAL CORNER
SACRAMENTO CHILDREN’S FUND ADDRESSES NEEDS
OF CHILDREN IN FAMILY LAW PROCEEDINGS
In 2001, Bartholomew, Wasznicky & Molinaro LLP became involved with a non-profit corporation, Sacramento
Children’s Fund. The organization was created to address certain needs of children and family law proceedings in which
the child is represented by Minor’s Counsel. Since its inception, the Fund has been very successful in offering gifts and
services to Sacramento county children in need.
The Fund offers services specifically to children in Family Court. While similar services are sometimes offered in other
court proceedings, a gap has existed where children in Family Court are concerned. Since The Fund began fulfilling
this need, numerous gifts of both cash and in-kind services have been provided including counseling, evaluations and
services related to visitation, self-esteem building gifts (such as monies for school activities and trips) which are otherwise
not affordable for families.
Each year donations to the Sacramento Children’s Fund come from various individuals and companies including
family law attorneys, judges, mental health professionals, and other family law service providers. The collaboration of
these individuals and organizations has made a positive, direct impact on family law litigants and their children.
Contributions to the Sacramento Children’s Fund are always welcome. Anyone wishing to make a tax-
deductible donation can make a check payable to Sacramento Children’s Fund, c/o Bartholomew, Wasznicky &
Molinaro LLP, 4740 Folsom Boulevard, Sacramento, CA. 95819. For further information on The Fund, call
the law firm: (916) 455-5200.
“Children are our most valuable
natural resource. HERBERT HOOVER
Carolyn Haehn Celebrates 25 Years in Family Law
If you’ve stepped into Bartholomew, with Hal’s cases, preparing documents, filing papers, mak-
Wasznicky & Molinaro LLP anytime ing appointments and meeting with clients.
over the years, you can be sure that Carolyn has witnessed many changes in the past 25 years,
you have come into contact with including the firm’s tremendous growth and several reloca-
Carolyn Haehn. This year marks tions. What began as a two-lawyer, three-staff team has
Carolyn’s 25th year working with Hal now tripled since the firm’s inception. While growth is a
Bartholomew—the Firm’s managing natural progression of a successful company, some things
partner—in the field of Family Law. never change. Carolyn states, “We work as a team, and
Carolyn holds the special distinction have always helped each other out when we can. We’re
of being the law firm’s employee with the most tenure. like family here.” It is this strong personal connection
Carolyn began her career as a legal secretary in 1978, that has been an important factor in Carolyn’s longevity
initially working for attorneys Hal Bartholomew, Gary with the firm. In a quick scan of 25 years of memories,
Livaich and Richard Desmond, along the way. Since the Carolyn admits her most memorable was her most
establishment of Bartholomew, Wasznicky & Molinaro recent—celebrating her 25th Anniversary in the field.
LLP, Carolyn has worked as Hal’s paralegal—keeping up Congratulations Carolyn on your Silver Anniversary!
2004 : VOL.15 : PAGE.2
PROFILE: MARINA BURHAN IS NEWEST ATTORNEY TO JOIN THE FIRM
Marina Burhan has recently joined Bartholomew, emphasis in International Studies.
Wasznicky & Molinaro LLP, where her primary area of She received her Juris Doctor
practice is in Family Law. degree from Creighton University
Prior to joining the firm, Marina practiced law in a in Omaha. Following graduation,
Roseville-based general civil litigation firm. While there, Marina relocated to California
she was exposed to many areas of law including family where she was admitted to the State
law, personal injury, workers’ compensation, probate, bank- Bar of California in 2001.
ruptcy, criminal defense and business law. It was Marina has many professional affili-
here that she discovered her passion for Family Law. During ations including membership in the State Bar of California
law school, Marina clerked at the District Attorney’s Office and its Family Law Section; Sacramento County Bar
in Omaha, Nebraska, working in the arena of legal health- Association and its Family Law Section; Women Lawyers
care compliance. Marina’s experience in a wide range of legal of Sacramento; Barrister’s Club of Sacramento; MCLE
issues, and her passion for Family Law, make her an invalu- Council Representative and Associate Editor of the Family
able addition to Bartholomew, Wasznicky & Molinaro LLP. Law Counselor for the Family Law Section of the
Marina received her Bachelor of Arts degree magna Sacramento County Bar Association. Marina’s professional
cum laude from the University of Nebraska, Omaha, major- passion is matched by her personal pursuits—she enjoys
ing in International Management and Business with an gourmet cooking and scrap booking and still manages to
squeeze some quality family time into her schedule as well.
POTENTIAL TAX TRAPS continued from page 1
The head-of-household filing status provides favorable tax rates. An unmarried taxpayer who maintains as his or her home
a household which, for more than half the year, is the principal place of abode of any unmarried child or stepchild or any
other person who is a dependent of the taxpayer, qualifies for these rates. Unmarried taxpayers need not be entitled to
claim the person as a dependent to qualify as head of household.
There are different rules for spouses living apart for the last six months of the year. A married taxpayer must be entitled
to claim the qualifying individual as a dependent in order to file head of household. Further, the dependent must be a
child, an adopted child, or stepchild.
In California, there is a six-month waiting period before a divorce can be final. Therefore, some consideration should be
given to filing for divorce prior to July 1 of the year to have options available to plan for the tax consequences of your
filing status. As an alternative, a judgment of legal separation can be obtained in California. When a legal separation is
obtained, the parties are considered unmarried as of that date for tax purposes.
Child support payments made as required by a divorce or separation agreement are not included in the income of the
payee, nor are they deductible by the payor.
To be continued in next edition…
Beverly Brautigam is a Certified Public Accountant with Brautigam & Co. in Sacramento, (916) 447-7641.
Hal Bartholomew is a Certified Family Law Specialist with Bartholomew, Wasznicky & Molinaro, LLP .
• 1/2 of all recent marriages will end in divorce
• 60% of all divorces involve children
• People who graduate from high school and/or college have lower rates of divorce
• 87%: Percentage of people in the U.S. who believe they will find “that person”
when they are ready
Marriage, Divorce, and Children’s Adjustment by Robert E. Emery; Divorce Related Transitions, Adolescent
Development, The Role of the Parent-Child Relationship by Alice M. Hines; Gallup Poll sponsored by Rutgers University
PAGE.3 : VOL.15 : 2004
4740 Folsom Boulevard
Sacramento, CA 95819
INSIDETraps In Separation Or Divorce—Part 1
p1 Potential Tax
p2 The Legal Corner: Sacramento Children’s Fund
p2 Team Solutions: Carolyn Haehn Celebrates 25 Years
p3 Profile: Marina Burhan Joins The Firm
Wednesday, June 2, 2004 THE DIVORCE COURSE
Learning Exchange Course taught by Hal Bartholomew
4740 Folsom Boulevard, Sacramento
Registration: (916) 455-5200
WHAT YOU CAN LEARN FROM A TAX RETURN sponsored by Attorney’s Briefcase
Tuesday, May 25, 2004 San Francisco
Thursday, June 3, 2004 Los Angeles
Course Instructors: Hal Bartholomew and Beverly Brautigaum, CPA
Course Locations/Registration/Information: atybriefcase.com or (510) 836-2743
DAY LONG DIVORCE/TAX COURSE FOR CPAs AND LEGAL PROFESSIONALS
Thursday, Sept. 23, 2004 Los Angeles
Tuesday, Oct. 5, 2004 Sacramento
Friday, Nov. 12, 2004 San Diego
Course Instructors: Hal Bartholomew and Beverly Brautigaum, CPA
Course Locations/Registration/Information: (800) 877-5895
VISIT WWW.DIVORCEPAGE.COM OR CALL 916.455.5200 FOR MORE INFORMATION.