GirlLegal

OASDI/EE Tax

GirlLegal — Wed, 28 Jul 2010 13:45:47 +0000

Dear GirlLegal: I just started a new job and on my pay stub I noticed I’m getting taxed for OASDI/EE. The problem is I’ve never had this tax taken from any previous job before in my life. What is this tax, and is it legal?

Answer: Congratulations on your new job. “O ld A ge, S urvivors and D isability I nsurance”. It’s the formal name for social security. More frequently it’s referred to as “FICA tax”. (”Federal Insurance Contribution Act”). It stands for Old Age, Survivors and Disability Insurance and it is not a one time tax. It is Social Security and Medicare tax.

Essentially, Social Security tax/OASDI was created to insure all workers and their families against certain universal risks, while spreading the costs and benefits of that insurance protection among the entire workforce. When you get your paycheck and look at the before and after tax amounts - OASDI taxes are part of those withholdings. In 2010 you get to pay a generous 6.2% of your pay and your employer also gets to match that amount. But, the good news is that this tax stops once your earnings hit $106,800 for the year.

To answer your question, yes - this is legal. In fact, everyone who is eligible to pay taxes, pays OASDI. A person contributes to Social Security either through payroll taxes or self-employment taxes under the Federal Insurance Contributions Act (FICA) or the Self-Employed Contributions Act (SECA). Employers match the employee contribution, while self-employed workers pay an amount equal to the combined employer-employee contributions. (Self-employed workers receive a special tax deduction to ease the impact of paying the higher rate.)

Like I said above, there is a maximum yearly amount of earnings subject to OASDI taxes - for 2010 this threshold is $106,800; and the 2010 tax rates are as follows: SS (Social Security) tax rate – 6.2%; Medicare tax rate – 1.45%. There is no upper limit on taxable earnings for Medicare Hospital Insurance. Employees whose contributions exceed the maximum taxable amount because they worked for more than one employer can receive refunds of excess FICA payments when they file their tax returns.

You’re probably familiar with the fact that this program benefits certain people. Specifically, it provides monthly benefits to qualified retired and disabled workers and their dependents, and to survivors of insured workers. Eligibility and benefit amounts are determined by the worker’s contributions to Social Security. Benefits are paid as an earned right to workers, their families and their survivors. There is no means test to qualify for benefits.

Taxes are allocated to the Old-Age (Retirement) and Survivors Insurance (OASI), the Disability Insurance (DI), and the Hospital Insurance (HI) Trust Funds. In addition to the taxes on covered earnings, OASI and DI trust fund revenues include interest on trust fund securities, income from taxation of OASI and DI benefits, certain technical transfers, and gifts or bequests. By law, the OASI and DI trust funds may only be disbursed for:

1. Monthly benefits for workers and their families.
2. Vocational rehabilitation services for disabled beneficiaries.
3. Administrative costs (currently less than 1 percent of expenditures).
4. The lump-sum death payment to eligible survivors.

Social Security benefits are essential to the economic well-being of millions of individuals. The program pays benefits to more than 90 percent of those 65 or older; and is the major source of income (providing 50 percent or more of total income) for over half of these beneficiaries.

Here are additional references: http://www.dictionary.reference.com/browse/OASDI and http://www.urban.org/uploadedPDF/1000596_redistribution_under_OASDI.pdf

I hope that you find this information useful.

Thanks for visiting GirlLegal.com - I strive to respond to all questions as a free service to the internet community on an ongoing basis. The intent is to provide answers that are both practical and useful. Feel free to ask questions and link back to this website.

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Criminal record searches

GirlLegal — Mon, 05 Apr 2010 16:27:02 +0000

Dear GirlLegal: What is the best site for free criminal record searches? I noticed that most sites that claim it have no results for searches.

Answer: That’s a good question. For the most part, I have not found any free criminal record searches either. These are usually paid services — and mostly corporations use them to run criminal searches on potential employees, or residential housing providers use them to run credit checks on potential renters.

There are many reasons someone may want to perform a background check or a person search. Small business owners may want to run a thorough check on a potential employee or another business. Landlords may want to perform bankruptcy or tenant checks. And, parents may want to know more about a babysitter or nanny. Knowing everything from felonies to fraudulent claims can help you better determine whether or not you should do business with or associate with a particular person.

As it turns out, there are free criminal records searches. But, then in order to actually get the information you may be required to pay a fee. However, I have found that most courthouse searches are free; but, you need to be prepared to spend time searching if you want to get the best results from a criminal records search. The caveat is that a number of courthouses have not converted to electronic storage of information, but for those that have, you can do searches if you have specific identifying information on the person you are searching.

I have also found that you could easily type a persons name into google, yahoo, or any other search engine for free and get limited information. If the person you are searching has an unblocked Facebook page, then you can usually find them and can try to get more identifying information that could help in your criminal information search.

I hope that you’ve found this response helpful.

Copyright (c)2010 by Zihriah Inc. Thank you for your interest in GirlLegal.com. We do not allow republication of our full newsletters and articles. However, you can post a portion (no more than 90 words, 1-2 paragraphs) of our content with a live link back to our homepage (http://www.GirlLegal.com) or a link to the specific article you are quoting from.

Insurance Death Benefits & Dead Peasant Policies

GirlLegal — Mon, 05 Apr 2010 16:07:41 +0000

Dear GirlLegal: My family member recently passed away from cancer. Her family has to pay huge amounts for the medical bills and funeral costs, in addition to loss of her income. Her husband received a call from an insurance company that his wife’s employer received almost a quarter-million dollars because of his wife’s death, but they never gave him a penny of this. Is this legal? Can companies do this?

Answer: I am so sorry to hear about your family member passing. Cancer takes away so many of our loved ones, including my dad who passed away a few years ago. To answer your question - yes, this is legal in some states; companies can take out insurance policies on their employees and name themselves beneficiaries - this is known in the insurance industry as “Dead Peasant Insurance.”

Corporate-owned life insurance (COLI ) (sometimes referred to as dead peasant insurance ) is life insurance on employees’ lives that is owned by the employer corporation, with benefits payable to the corporation. COLI was originally purchased on the lives of key employees and executives by a company to hedge against the financial cost of losing key employees to unexpected death, the risk of recruiting and training replacements of necessary or highly-trained personnel, or to fund corporate obligations to redeem stock upon the death of an owner. This use is commonly known as “key person” insurance. Congress and the IRS set some guidelines and limits on this practice. Today, COLI is most common for senior executives of a firm, but its use for general employees is still practiced.

Dead peasant insurance is a term used within the insurance industry to describe rank-and-file employees whose lives are insured by policies of corporate owned life insurance for an employer’s benefit. This means that the company receives the life insurance benefits when the covered employees die. You may be surprised to find out that young female employees who die generally generate the highest amount in insurance benefit payouts.

Please keep in mind that this money does not go to the deceased employees’ family - the company adds it to its books and keeps it. These benefits pay out a lot of money to the employers for the loss of an employee, and the company might use this policy to pay for retirement benefits and other perks not for you or your fellow workers, but for your company’s top executives. In recent years, the Office of the Comptroller of the Currency affirmed that banks can buy life insurance to finance employee benefits. But filings show that executive compensation accounts for most of the benefits. Companies don’t use the policies as piggy banks to pay for compensation and benefits. Rather, they benefit from keeping the money in the contracts: thanks to accounting rules for life insurance, gains on the investments — from stocks, hedge funds, bonds and the like — aren’t just tax free, but are reported as income each quarter.

To quickly recap, there is a difference between “Key Person” life insurance (that’s the type of policy that a company secures on a CEO, executives, or a highly-trained specialist) and “Dead Peasant” life insurance, which is the type of policy that a company secures on any non-executive and/or interchangeable employee.

Above, I mentioned that Dead Peasant policies are legal in some states, but they are illegal in most states for very good reason. Historically they were abused and encouraged employers to skimp on safety in high-risk occupations because many employees were worth far more dead than alive, particularly if they were unskilled and easily-replaceable laborers.

These days COLI, including dead peasant policies, are basically a tax shelter - although that may change if the IRS starts taxing the payouts. Under the Internal Revenue Code (”IRC”) dealing with life insurance benefits paid due to the death of the insured, the benefits are usually excluded from the taxable income of the beneficiary. Because of the tax-free nature of death benefits, the IRC prohibits the deduction of the premiums paid for life insurance when the premium payor is also the owner of the insurance.

Companies should have to disclose when they take out a policy on you as an employee - or, even better, obtain your permission to do so - And, a number of our lawmakers agreed. As it stands, most states have advise and consent laws (See 26 U.S.C. §101(j)(4) Notice and Consent requirements ) that technically require companies to get workers permission before buying life insurance on them, but many businesses circumvent these laws by purchasing the insurance in one of the states that do not require notice or consent, including Delaware, Georgia, New Jersey, North Carolina, Pennsylvania and Vermont.

Among the corporations that have bought such insurance on rank-and-file workers , nicknamed “janitors’ ” or “dead peasants’ ” insurance, are AT&T, Dow Chemical, Nestle USA, Procter & Gamble, Walt Disney, Winn-Dixie, Wal-Mart, American International Group Inc., Fannie Mae, Freddie Mac, Kimberly-Clark Corp. and Tyson Foods, Inc. Efforts to rein in the practice largely have been unsuccessful, including the most recent rules Congress enacted in 2006. The rules limit companies to buying life insurance to just the top third of earners, who must provide consent. But the rules don’t apply to life-insurance that employers bought before August 2006, which cover millions of current and former employees - including employees that have long since left the company.

The website http://deadpeasantinsurance.com/ provides a list of companies that have taken out policies on their employees. I was not surprised to find a number of well known companies on this list, in addition to those listed above. It turns out that this information is hard to obtain, so if the company that you work for is not listed, that doesn’t mean that they have not taken out insurance policies on their employees. You can find more generalized information on dead janitor and dead peasant insurance at: http://www.michaelmoore.com/words/mike-in-the-news/congressman-targets-dead-peasants-insurance .

For educational purposes, I’d like to point out another insurance policy known as STOLI (stranger-originated-life-insurance). These STOLI arrangements have gained attention because, generally, a party purchasing life insurance must have an “insurable interest” in the person being insured. For example, a person has an insurable interest in his or her spouse, or a company has an insurable interest in their executive or employee. In a STOLI transaction, however, a person with no insurable interest (a stranger) in another persuades the other person to obtain life insurance with the understanding that after a certain time (usually two years) the insured will sell the policy to the stranger. If you feel that you have been a victim of a STOLI arrangement, please contact your state’s Office of Insurance Regulation.

Again, I am sorry about your family member. And, I hope that you find this information useful.

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Legal Age in Nebraska

GirlLegal — Sat, 16 May 2009 19:25:52 +0000

Dear GirlLegal: I just need to know how old you have to be with a guy older than you in the state of Nebraska. I’m 17 and I’m with this guy that is 27. And I just need to know whether or not it would be alright.

Dear Jojo from Nebraska: Thank you for your question. By “be with” I am assuming that you mean “dating” this certain individual who is 27 years of age. I hope the following information helps you.

To answer your question directly, in the state of Nebraska all persons under nineteen years of age are declared to be minors, but in case any person marries under the age of nineteen years, his or her minority ends.

However, the age of majority, or emancipation, of a minor in Nebraska varies. The legal drinking age is different from the legal driving age, for example. The Nebraska Statutes and constitution can be searched with terms like “age of majority” or “minor” in order to find a more specific answer. Persons seeking legal interpretations of the statutes should contact an attorney.

Essentially, this means that unless you are legally emancipated (via a court order by the state of Nebraska) or are legally married, then your 27-year-old friend could find himself in some trouble with the law for dating you. A platonic friendship (non-sexual friendship) should not be a problem, but a intimate and/or sexual relationship very well could be.

Copyright (c)2010 by Zihriah Inc. Thank you for your interest in GirlLegal.com. We do not allow republication of our full newsletters and articles. However, you can post a portion (no more than 90 words, 1-2 paragraphs) of our content with a live link back to our homepage (http://www.GirlLegal.com) or a link to the specific article you are quoting from.

Providing a criminal history statement

GirlLegal — Fri, 26 Dec 2008 00:26:00 +0000

Dear GirlLegal: I have a right to Italian citizenship by marriage, but in order to get it I have to provide my criminal record from everywhere I’ve lived. In my case it will be a statement of some sort to the effect that I have no criminal record, but I’ll need it from several states and a few foreign countries. Do you have any idea where I would go or who I would ask for that? The states are Maine, Maryland, Colorado and California.

Dear Apricotia: One of the ways you can obtain Italian citizenship is by way of marriage, and you can still keep your American citizenship if you choose. But, you may need to provide your spouse’s documents such as birth certificate, etc. While it is not necessary, your spouse’s Italian birth certificates should be with the apostille to guarantee there are no questions as to the validity of the documents. You should contact the Italian Consulate in your state of residence to determine whether you an apostille or even a translation for your American documents is needed. I hope the following information helps you.

In order to obtain a statement of your criminal history (or in your case, lack thereof), you may need to obtain a State Police Clearance letter from each state you resided in. It is best to have this letter signed by an official and not just an administrative clerk. You may even need an FBI Clearance from the United States; and this would include a letter and fingerprint card. It may be a good idea to contact the Italian Consulate in your state of residence to determine if you need one of these, or both.

First, you should determine the state police entity in your state. Some states have a Department of Justice, others have a State Police Department, and others have a Department of Public Safety, or State Sheriff’s department. Contact the state entity to obtain further instructions to request your criminal clearance letter. When speaking to them you should be clear that you may need a notarized criminal clearance letter from the State (not from a City or County). Most of the time, they will know exactly what you need. Most states do fingerprint checks, but not all. Fingerprint clearances are better if you have the option.

You should call around to your local police stations and find out which location closest to you does fingerprinting. Some larger cities have private companies that also offer fingerprinting services. Make sure that the correct cards are used, and find out which days and during what hours they will fingerprint. It is generally a good idea to get two (2) sets of fingerprints in case one gets smudged or unreadable.

Second, for FBI Clearance you should use the FD258 fingerprint card which you can download here: http://www.fbi.gov/hq/cjisd/pdf/fpcardb.pdf (the FBI will accept it on regular copy paper. Make sure that your name, date of birth, and place of birth are printed on the top of the card. After being fingerprinted, take the card home and prepare a written request to the FBI for a copy of your criminal record. More detailed instructions for obtaining FBI Clearance can be found if you click on this link: http://www.fbi.gov/hq/cjisd/fprequest.htm. These instructions include a sample cover letter to mail with the fingerprint cards when requesting your clearance.

Again, you should confirm this information with Italian Consulate in your state of residence.

Copyright (c)2010 by Zihriah Inc. Thank you for your interest in GirlLegal.com. We do not allow republication of our full newsletters and articles. However, you can post a portion (no more than 90 words, 1-2 paragraphs) of our content with a live link back to our homepage (http://www.GirlLegal.com) or a link to the specific article you are quoting from.

Expunging a Criminal Record

GirlLegal — Fri, 05 Dec 2008 18:45:56 +0000

Dear GirlLegal: Hello, I need advice on getting a charge erased from my criminal record. The charge is 5 years old and I want to know if I need to hire a lawyer or can I go through the process myself. If so, where do I begin?

Dear Jerry: You want to know if you can erase a charge from your criminal record, and how. I will need to answer this question in several parts, and I hope the following information helps you.

Expunging a charge from your criminal record can be a bit complicated, and it is advisable to hire an attorney to do this for you. First, I’ll explain expungement and its potential effects, and then the basic process to expunge a charge from your record.

When a criminal record is “expunged,” in most senses the record is treated as if it does not exist. However, there are limits to expungement as some states maintain separate registries for people who have been convicted of child abuse or sex offenses, and the expungement of a criminal record may not affect those registries. This means that for those particular charges a record of the arrest/conviction may remain on separate records, even if the court records or conviction is expunged.

States have very different rules on expungement. Some states may not allow expungement, while others may limit its availability to people who have only one criminal conviction on their records; but other states may be more generous. A lawyer can help you investigate the policies of the jurisdiction which issued the conviction to determine whether you are eligible for expungement.

Keep in mind that even if a record has been sealed or expunged, evidence of the criminal conduct may remain on part of the public record. For example, even if a conviction is expunged or the court record was sealed, there may be a public arrest record associated with the incident, and there may also be a record of the fact that a criminal charge was filed even though the results of that arrest is not publicly available.

Expungement is not the only option available to clear your criminal record. Most jurisdictions have a process where you can apply for a pardon. While an expungement is typically issued by the court in which a person was convicted of a crime, a pardon is an executive action which can partially or fully lift the effects of the conviction. Another option is to seal your criminal record, although this usually occurs only with juvenile records (and sometimes even then only if they stay out of trouble during their first few years of adulthood). Again, there are differences in the process, because in some jurisdictions juvenile records are sealed automatically, while in others it is necessary to bring a motion within a certain number of years of adulthood in order to have the record sealed. It is very unusual for the criminal convictions of adults to be under seal.

Copyright (c)2010 by Zihriah Inc. Thank you for your interest in GirlLegal.com. We do not allow republication of our full newsletters and articles. However, you can post a portion (no more than 90 words, 1-2 paragraphs) of our content with a live link back to our homepage (http://www.GirlLegal.com) or a link to the specific article you are quoting from.

Welcome

GirlLegal — Wed, 01 Oct 2008 11:33:14 +0000

There are times when you may find yourself in a legal situation where you wish you had a second opinion…

GirlLegal.com® is a practical legal information column and “How-To” Guide designed to provide you with that second opinion, so that you can make an informed decision.

GirlLegal.com® provides practical advice at no cost as a service to the internet community. Profits are not generated from this blog, nor is there intent to - the information provided is, and will remain free.

GirlLegal.com® researches and responds to questions asked in the comments section using applicable law, regulations, and statutes, in addition to personal legal experience. Because this blog is read nationwide, GirlLegal.com® strives to provide generalized repsonses, and any state specific information is indicated as such. GirlLegal.com® does not quote any caselaw or statutes because GirlLegal.com® is not your attorney, and the information provided is meant only to be informative- not as legal advice. I hope that the information here is helpful to you.

Please note that while GirlLegal.com® is owned and managed by an attorney, GirlLegal.com® is not your lawyer. If you need legal advice, please seek the advice of an attorney.

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Evictions

GirlLegal — Sat, 30 Aug 2008 23:57:27 +0000

Dear GirlLegal: Is it legal for a Landlord to put you out just because you had questions about previous rent being paid? He stated that I had this month to vacate his property. Please help I need to know what can I do about this situation. Thanks.

Dear Patrice: You want to know if a tenant can be evicted for no reason, or for asking questions about prior rent payments. I hope the following information helps you.

Generally a landlord cannot evict a tenant for no reason. He must base his decision on one of five legally sufficient grounds for eviction: lapse of time, nonpayment of rent, material noncompliance with the lease, breach of statutory duties, and illegal conduct or serious nuisance.

However, these grounds usually apply to landlords and tenants with written lease agreements. If there is no written lease, and the tenant is paying monthly payments, then a landlord needs only to give the tenant written notice (usually 30 days) to terminate the lease. If the tenant does not leave at the end of that time, the landlord can evict.

An “eviction” is a legal proceeding by which the landlord seeks to reclaim the premises and put the tenant out. Landlords should find out the legal grounds for evicting a tenant as well as the proper notification requirements. You, as the tenant could receive compensation for costs paid because of unlawful eviction.

Since you are the tenant, you need to know how you can defend yourself against an unjustifiable eviction. To protect yourself, know what your lease says. Also find out the eviction laws in your area by contacting your lawyer, by contacting your local government—many cities have a department of consumer affairs or housing department to help you. Or, if your rent is subsidized, check whether the subsidy program will help. You can also ask the local library for the municipal code regulations on eviction.

The following are legal grounds for eviction in most areas:

Non-payment of rent: The landlord must inform the tenant in writing that full rent is due by a specific deadline or the lease will be terminated. If the landlord refuses to take full payment and the tenant can prove it, the eviction can be challenged in court. After the deadline, the landlord doesn’t have to accept payment.

Other tenant violations: The landlord must inform the tenant in writing of the supposed violation. The tenant must have ample time to correct the problem. If the tenant does nothing to correct it, the landlord may evict.

Lease has expired: If the landlord doesn’t extend an expired lease and the tenant refuses to leave, the landlord may evict. The tenant must be given written notice.

No lease: When a tenant rents month to month without a lease, a landlord needs only to give written notice (usually 30 days) to terminate the lease. If the tenant does not leave at the end of that time, the landlord can evict.

Copyright (c)2010 by Zihriah Inc. Thank you for your interest in GirlLegal.com. We do not allow republication of our full newsletters and articles. However, you can post a portion (no more than 90 words, 1-2 paragraphs) of our content with a live link back to our homepage (http://www.GirlLegal.com) or a link to the specific article you are quoting from.

Leases

Susan — Sat, 30 Aug 2008 23:55:22 +0000

Dear GirlLegal: I’ve had to downsize recently, and just found an apartment. Now that I’m renting, I’m not to sure what the lease should say. Can you please help?

Dear James from N.V.: Finding yourself in this new situation can be challenging, and I hope the following information helps you. For starters, the lease is an agreement between the landlord and the tenant for renting a property. The lease can be oral (spoken) or in writing. If the tenant does not have a written lease, he/she has an oral lease.

In either situation, the lease should at least tell: 1 ) who is the tenant and who is the landlord; 2) the location being rented; 3) the amount of rent due; 4) the length of time that the property is being rented (month-to-month or year-to-year): and 5) who pays the utilities. The tenant must make sure that all blanks are filled in or crossed out of the lease and that all changes are made before signing.

The lease sets forth the obligation which the tenant owes to the landlord and the obligation which the landlord owes to the tenant. NEVER SIGN ANY LEASE BEFORE READING IT CAREFULLY. If the tenant has a written lease, every agreement between the tenant and the landlord must be put in the lease, including any promises by the landlord to make repairs. Always ask for and get a copy of the lease.

Copyright (c)2010 by Zihriah Inc. Thank you for your interest in GirlLegal.com. We do not allow republication of our full newsletters and articles. However, you can post a portion (no more than 90 words, 1-2 paragraphs) of our content with a live link back to our homepage (http://www.GirlLegal.com) or a link to the specific article you are quoting from.