Help with DSA2008

DSA Overview
Starting DSA
DSA—Activation
DSA License Agreement

THE DSA PROGRAM PAGES
What is a Case?
DSA Case Selection Page
Main Case Page
Personal Information: Page 1
Gross Income: Page 2
Adjustments to Income: Page 3
Itemized Deductions: Page 4
Federal Tax Credits as Claimed on Federal Tax Return: Page 5
State Income Additions: Page 6
State Income Subtractions: Page 7
State Itemized Deductions: Page 8
Miscellaneous State: Page 9
State Exemptions and Tax Credits: Page 10
Alternative Minimum Tax: Page 11

ANALYZING A CASE
A. Basic Assumptions
B. Alimony and Child Support Impact on Disposable Income
C. Alimony Calculation Based on Dependent Spouse's Need
D. Tax Impact For The Family (Trade Off of Alimony vs. Child Support)
E. Incremental Alimony vs. Child Support Impact on Net Income
F. Assets and Liabilities
G. Present Value Analysis

DSA Minimum System Requirements
DSA Installation Set

DSA Overview

DSA is used in the process of arriving at an equitable agreement on alimony and child support.

We recommend the following process:

Collect all facts and data related to the parties, incomes, taxes, assets and liabilities.
Within DSA open a new case in which to store the case information.
Enter the information on the appropriate data pages. DSA has 11 data entry pages numbered 1 through 11 that are accessible using the buttons at the top of the Main page.
Run the Basic Assumptions Analysis (Analysis A accessible through the buttons on the left) to verify and provide an overview of the case.
Run analyses B through E to become familiar with the financial impacts of the case.
Use the Asset and Liabilities Analysis to aid in the division of assets.
Use the Present Value Analysis if appropriate to help negotiate lump sum alimony or to determine the need for Life Insurance to secure the payment of alimony and child support, college expenses, etc.
As the case is negotiated, or as each side offers proposals, rerun the analyses to determine the financial impacts in order to make counter offers.
Enter the amount of the alimony and child support when agreement has been reached and prepare the final report.

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Starting DSA

On the Program Menu, click on the DSA2008 icon.

DSA allows you to analyze each client's case. After entering the case data, DSA will analyze the financial repercussions of various alimony and child support arrangements and print charts and reports which will clarify the computations. Each case is stored as a separate file that can be opened, reopened, edited and/or rewritten. You can move these files as any other files from hard disk to floppy for back-up and archiving purposes.

DSA - Activation

The program needs to be activated on your computer to be fully functional. Without activation, the program will not allow you to print reports or save case data.

Each activation code is good for only one computer. To receive the activation code that is valid for that computer, you will need to pay the license fee and contact DSA with the Authorization Request code that gets generated for that computer. If you have a demonstration version of DSA that has not been activated, you will see the Activation Information screen when you start DSA. If you want to continue without activating DSA, click the "Continue to Demonstration Version" button. If you are ready to activate your copy of DSA, click the Activate Now button.

DSA License Agreement

The DSA program is licensed for your use according to the terms of the license agreement that you must read and agree to before using DSA. Once you have read the license agreement, select the " Agree" option at the bottom of the page and click "Next." If you do not agree to the license terms, the program will exit.

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THE DSA PROGRAM PAGES

What Is a Case?

In DSA, a case will consist of all the income and tax related data for the two parties. The case form will elicit all information pertinent to the case and store it for future access. All analyses and reports are done on a case-by-case basis.

When a new case arises, a new DSA case is opened and saved under a new name (typically the client's name). You can later reopen the file as an existing case and continue to edit the collected data and/or perform further analyses on it.

DSA Case Selection Page

This page allows you to specify the attorney's name, specify the tax year, open a new or existing case, copy, rename or delete a case, display help text, display and set configuration information or exit the program.

New Case: Click on this to open a new case with no data. The empty form is ready to receive all pertinent data. After entering the information, save the case under any desired name. This name will be used to open the case in the future.

Open Case: Click on this to open a previously prepared case that you want to edit or analyze further. Select one by clicking on the desired file and then clicking on OK. This brings up the opened case. You can save the case again, overwriting the previously saved data. You can also save it under another name, effectively creating a new case.

Copy Case: Click on this to copy an existing case. You will be presented a form that asks you to type in a new case name to copy current case data without modifying the original case.

Rename Case: Click on this to rename a case. You will be presented a form that asks you to type in a new case name for the current case.

Delete Case: Click on this to delete an existing case. You will be asked to confirm that you want to delete the case.

Exit: Click on this to exit DSA. You will be asked to confirm that you wish to exit.

Help: Click on this to display a page of help text.

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Main Case Page

This presents either an empty form for a new case or a form filled with previously entered data for a reopened case.

The Main page has data entry page selection buttons across the top which have been numbered 1 to 11. There are also "Previous" and "Next" buttons to move from one data entry page to the next. You will need to complete each of the data entry pages that are pertinent to the case before doing any analysis.

There are eight analysis page selections buttons down the left side of the page that have been assigned letters A through G. Each can be used to run an analysis.

Case Selection functions still remain available using the menu selections at the top of the page. You will be returned to the Case Selection page if you close the Main Page.

SAVE CASE: WHEN YOU HAVE COMPLETED USING DSA FOR DATA ENTRY OR ANALYSIS, REMEMBER TO SAVE THE CASE USING THE SAVE CASE SELECTION FROM THE FILE MENU.

You can save case data even after inputting only a portion of the data. Later, you can reopen the case file to resume data entry and/or case analysis.

To save the case from the Main page, click on the Save selection from the File menu. This will bring up a standard Windows dialog box that allows you to save the case.

Click on any data entry box on the Main page, or any entry page, to move the cursor to that item and type in the required information. You can also move to the next field using the tab key, which is most effective when entering data. You can move backward between fields by holding the shift key and pressing the tab key.

Help information for each data entry box is shown in the blue area across the bottom of the data entry pages.

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Personal Information: Page 1

First and Last Names: Type the first and last names in the respective boxes for the payor and the recipient. When you are creating a new case, the last name of the payor is usually the case name. If, however, you have another case by the same name, a more precise case name will be required. It is best to follow a case naming convention most in line with your filing practices.

Filing Status: Select the federal tax filing status by clicking on the appropriate status buttons for the payor and the recipient. The buttons are S for filing as Single, J for married filing Jointly, M for Married filing separately and H for filing a Head-of-household.

Exemptions: Click on the right- or left-arrow to increase or decrease the number of exemptions claimed on the federal return.

Additional Deductions: This is the number of additional deductions claimed for old-age, blindness or other disabilities. Type in the appropriate number of additional deductions in the box provided.

Filing as Resident of State: Click on the State down-arrow for a drop-down list of states. For the payor and recipient, select the state in which each is domiciled

Income and Tax Information Pages 2 through 11

Each page has a number of items of information required. Note that each category requires different data to be entered. Further, for state-related categories, when payor and recipient file in different states, different tax codes apply. Thus, only applicable data boxes are displayed on-screen.

The categories and items described on each page have conventional meanings in federal or state tax forms or schedules.

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Gross Income: Page 2

Wages and salaries: earned income from jobs
Interest/Dividends on investments
Self Employment Income from business
Capital Gains/Losses from sale of investment assets
IRA/Pension Distributions received from these plans
Rental Property/S-Corp Income/Loss
Social Security benefit income
Other Income/Losses not accounted above
Non-Taxable Income: all income that is not subject to taxes

Adjustments to Income: Page 3

IRA/Keogh Deduction: deductible contributions made to these plans
1/2 Self-Employment Tax: half of OASDI and Medicare taxes attributable to self-employment income; This amount is computed by DSA. Whatever value is entered in this data box is replaced automatically by the program's computed value.
Prior Alimony: deductible payments to prior spouse
Other Adjustments to taxable income not accounted above
Adjusted Gross Income (AGI) = gross income total minus adjusted income total. This value is used in further tax-related computations.

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Itemized Deductions: Page 4

Medical Expenses (7.5% AGI): Input the actual medical expenses incurred, even though only the medical expenses in excess of 7.5% of AGI are counted as itemized deductions. DSA displays the entered amount in the Case form, but computes the allowed deductible amount for the Basic Assumptions report.
Income Tax paid to state and local jurisdictions that is deductible from federal taxable income
Real Estate Tax on qualified personal real estate property that is deductible from federal taxable income
Mortgage Interest on qualified real estate mortgage that is deductible from federal taxable income
Contributions to registered charitable agencies that are deductible from federal taxable income
Other Misc. (2.0% AGI): Input the actual amount of applicable deductions even though only deductions in excess of 2.0% of AGI are counted as itemized deductions. DSA displays the input amount in the Case form, but computes the allowed deductible amount for the Basic Assumptions report.
Less 3%/80%: This reduction in allowed total amount of deductions is computed by the 3%/80% rule for phasing out deductions. This amount is automatically computed by DSA.

Federal Tax Credits as Claimed on Federal Tax Return: Page 5

Child Dependent Care
Elderly/Disabled
Other Credits

State Income Additions: Page 6

These are values added to the federal AGI to arrive at the state taxable income. Different categories/amounts are applicable for different states. DSA displays only the data boxes applicable to the state.

Interest - State
Passive Activity Loss
Capital Loss
IRA Distribution
Pension/Profit
State Income Tax Deduction
Dividends - Other States
Business Loss
Federal Tax Refund
Local Interest
Moving Expenses

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State Income Subtractions: Page 7

These are the values subtracted from the federal AGI to arrive at the state taxable income. Different categories/amounts are applicable for different states. DSA displays only the input boxes applicable to the state.
Interest US Obligations
Social Security Benefits
Tax Refund - Other State
Tax Refund - Local State
Capital Gain
Unemployment Contribution
Pension/Annuity
State & Municipal Interest
Dividend US Obligations
Railroad Retirement
Disability Income
Local Retirement Benefits
IRA

State Itemized Deductions: Page 8

Itemized deductions vary from zero in some states to same-as-federal in others. In the latter case, a special category is displayed that is automatically computed by DSA.
Medical Expenses (7.5% AGI): Input actual medical expenses incurred. Only medical expenses in excess of 7.5% of AGI are allowed in itemized deductions.
DSA displays the input amount in the Case form, but computes the allowed deductible amount for the Basic Assumptions report.
Income Tax paid to state and local jurisdictions is deductible from federal taxable income
Real Estate Tax on qualified personal real estate property is deductible
Mortgage Interest on qualified real estate mortgage is deductible
Contributions to registered charitable agencies
Other Misc.: Enter the actual amount of applicable deductions. Only deductions in excess of 2% of AGI are allowed in itemized deductions. DSA displays the entered value in the Case form, but computes the allowed deductible amount for the Basic Assumptions report.
Less 3%/80%: This is the reduction in allowed total amount of deductions as computed by the 3%/80% rule for phasing out deductions. This amount is computed by DSA. State Exemptions/Credits Claimed: The program will automatically select the appropriate amounts-per-exemption for the state. Some states allow exemptions applied to taxable income. Others allow tax credits per exemption claimed. Further, some states allow special exemptions for age, blindness, other disabilities, education, or dependents. DSA will display input boxes applicable to the state.

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Miscellaneous State: Page 9

Miscellaneous adjustments and credits may be offered by the state. They most often will include credits for local taxes.

State Exemptions and Tax Credits: Page 10

Some states use exemptions that differ from the federal tax exemptions. Indicate those exemption adjustments on this page.

Alternative Minimum Tax: Page 11

The Alternative Minimum Tax can be a very complex calculation depending on the taxpayer’s circumstances. DSA includes the calculations as set forth on Form 6251 Part I and Part II. The entry lines in DSA match the Federal Tax Form 6251 lines as noted on the DSA entry page. Please see the list below of calculations that are not included in DSA.

Note on negative amounts: The State Tax Refund should be entered in DSA as a positive number. Where the notes on the DSA entry page list a Form 6251 line number shown with a minus sign, the amount that would have been entered on Form 6251 as a negative number should be subtracted from the number you enter into DSA.

DSA does not include adjustments for non-resident aliens, adjustments based on line 11 of the Itemized Deduction worksheet, adjustment to home interest that may be necessary for certain refinancing loans or child’s exemption amount adjustments based on age. DSA does not do Form 6251 Part III adjustments for complicated capital gains cases.

In cases involving complex capital gains situations or where you need a perfectly precise AMT number, you will need the Alternative Minimum Tax computed by a CPA and the result entered on the Computed Alternative Minimum Tax line.

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ANALYZING A CASE

A. Basic Assumptions

The Basic Assumptions Analysis is most helpful for providing a complete overview of the yearly financial status of both the payor and payee.

The analysis shows the federal and state taxable incomes and federal and state taxes estimated by DSA. The federal tax computation uses the actual tax rates, incorporating applicable income, adjustment and deduction categories. This computation is only meant to be an approximation. Some items computed by DSA are based on the federal tax rules for the specific tax year. This is true for applicable medical deductions, miscellaneous deductions and 1/2 self- employment tax adjustment.

Each state has a unique system for determining taxable income. DSA includes the tax profile for each state to estimate state taxes. This is also meant to be an approximation.

You can print this report by clicking on the Print button.

You should review all data on this analysis. If corrections are required, close the Basic Assumptions Analysis page to return to the Main Case form and proceed to correct any data entry items necessary on the appropriate page.

B. Alimony and Child Support Impact on Disposable Income

The Alimony and Child Support Impact on Disposable Income analysis shows how disposable net income changes for both the payor and payee at any specified alimony and child support amount.

Alimony and child support amounts are the pertinent inputs for the analysis. The alimony and child support amount can be specified as either weekly, monthly or yearly amounts.

The analysis will show not only the disposable net income, but also the change in the marginal federal and state tax rate as alimony and child support is increased or decreased. The output report is shown using the Run Report button.

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C. Alimony Calculation Based On Dependent Spouse's Need

The Alimony Calculation Based On Dependent Spouse's Need analysis shows the amount of alimony required to provide the recipient with a specified disposable net income.

The budget of the dependent spouse and the child support amounts are the pertinent inputs for the analysis. The budget of the dependent spouse and the child support amount can be specified as either weekly, monthly or yearly amounts.

The analysis will show the alimony required to meet the need as well as the marginal federal and state tax rates. The output report is shown using the Run Report button. A graph showing gross income, taxes, alimony, child support and net income for both the payor and payee is available in both bar and pie chart formats.

D. Tax Impact Analysis For The Family (Trade-Off of Alimony vs. Child Support)

The Tax Impact Analysis For The Family (Trade-Off of Alimony vs. Child Support) analysis shows the change in tax impact as the total amount to be paid as alimony and child support is allocated between the two.

Alimony and child support amounts are the pertinent inputs for the analysis. The alimony and child support amount can be specified as either weekly, monthly or yearly amounts.

The analysis shows the taxable income for the payor, payee and for the two combined starting with the total payment being fully allocated to child support and progressing in stages to the point where the total payment is fully allocated to alimony. The progression from child support to alimony is shown in 20 steps.

The output report is shown using the Run Report button.

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E. Incremental Alimony vs. Child Support Impact on Net Income

The Incremental Alimony vs. Child Support Impact on Net Income analysis will show how disposable net income changes for both the payor and payee as alimony and or child support is increased.

Alimony and child support lowest amounts and highest amounts, as well as the sized of the increment for each are the pertinent inputs for the analysis. The alimony and child support amount can be specified as either weekly, monthly or yearly amounts.

The analysis shows the disposable net income for the payor and the payee as alimony and child support are increased by the increments specified from the low to high amount specified.

The output report is shown using the Run Report button. A bar chart can also be produced.

F. Assets and Liabilities

The Assets and Liabilities analysis allows for the recording of the assets and liabilities of the parties. Real Estate, Bank Accounts, Brokerage Accounts, Retirement Plans, Furniture and Furnishings, Collectibles and Art, Vehicles, Life Insurance, Business and Professional Interests, and Other Assets each have their own asset groups. An unlimited number of assets can be recorded in each group.

To record an asset or liability, first select the group using the buttons as the top of the page. After selecting the group, click on the Add button. You will then need to enter the asset's description, title (Joint, Husband or Wife), whether or not the asset is exempt, whether it is active or passive asset, acquisition date, cost basis, value at the time of marriage, value at the time of complaint, current value, liens/mortgages against the asset, tax consequence of the sale, value subject to distribution, value to be distributed to the husband, value to be distributed to the wife.

Depending on the complexity of the case, it is not necessary to enter complete data for each asset or liability. What is required is the entry of the amount subject to distribution and the amount to be distributed to the husband and the wife.

The assets and liabilities entered are store with the case data and are retrieved when the case is next opened.

The analysis keeps track of the net worth combined and of the husband and wife separately along with the percentages being distributed to the husband and wife.

An asset can be removed from the analysis be selecting it and pressing the Delete button.

The output report can be produced using the Report button. After the report page has been opened, the report can be sent to the printer using the Print command from the File menu.

A download to Excel is available using the Download button. The format of the report can then be manipulated in Excel.

In Excel, use Page Setup to specify landscape 8 ½ by 14 printing, assuming your printer will print legal size. Also consider the Fit to Page option.

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G. Present Value Analysis

The Present Value analysis will show the current value of a future set of payments. This is particularly helpful in negotiating alimony buyouts and the life insurance requirement to secure alimony and child support payments. Pre-tax and after-tax present values are determined.

Tax rates for the payor and recipient, the interest or discount rate, the yearly payment amount, the number of years and probability of continuation are the pertinent inputs. Separate entries are available for pre-tax and after-tax payments.

After the inputs are completed, to calculate the present value, press the Calculate button.

The output report is shown using the Print button.

DSA Minimum System Requirements:

DSA will run on any computer properly configured to run Windows 2000 or Windows XP sufficiently equipped to run the Microsoft .NET Framework Version 1.1.

The following minimum configuration is recommended:

Pentium PC with 300 megahertz or higher processor clock speed recommended; 233 MHz minimum required (single or dual processor system); Intel Pentium/Celeron family, or AMD K6/Athlon/Duron family, or compatible processor recommended
128 megabytes (MB) of RAM or higher
100 megabytes (MB) of available hard disk space
Super VGA (800 x 600) or higher-resolution video adapter and monitor
CD-ROM or DVD drive
Keyboard and Microsoft Mouse or compatible pointing device
Laser or color inkjet printer for best presentation

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DSA Installation Set:

DSA is provided either on CD as a self extracting and installing program or via the WEB. Installation instructions follow.

Installing DSA From CD:

Note that you will not be able to install DSA if you do not have adequate rights to install software on your computer.

In Windows XP effective rights can be verified in the Control Panel by selecting User Accounts and seeing if you are a listed user with sufficient rights to install programs on the computer. For more information see your network administrator.

Insert the CD in your CD drive.
If the installation program does not start automatically, you can start the installation by clicking on Start then click on Run ? and typing E:\setup.exe in the text area provided, where E:\ is the drive letter assigned by your system to the CD drive.
The DSA Setup program will start.
Click on the OK button to proceed with DSA setup.
The DSA installation wizard will guide you through the remaining setup steps.
At the License Agreement page you must click on the "Agree" selection before being able to proceed to the next step.
It is recommended that you accept the standard installation folder but DSA can be installed anywhere on your local or networked drive.
If setup completes properly, you will see the Installation Complete page which you can close.

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