Wednesday, March 7, 2012

Before You Sign the Tax Return

Every year on April 15, my husband would race into the house at
 9:00 pm with the tax return he’d just picked up from his accountant.  "Sign here Honey,” he’d say, handing me a pen, and pointing to the pages with the little yellow tabs waiting for my signature.

However, “Sign here Honey” can come back to haunt you if you are ever divorced or widowed. Your husband isn’t necessarily trying to hide things from you by preparing the return.  He does it because you don’t. So ask him to explain what the numbers mean. He might be relieved that you’re finally taking an interest in the marital finances. Don't wait until the last minute to do it either.

If an accountant is doing your taxes, attend the meeting with your husband. This is a great place to ask questions because the accountant can explain things to you that often your husband doesn’t fully understand.

I know a woman who managed huge budgets for a large corporation. At home, she assumed the role of traditional wife, letting her husband manage their finances.

During her divorce proceedings a few years ago, she was asked if she saw the tax returns annually. She did. Did she review them? No, frankly, she trusted her husband. Wasn’t she concerned about what she was signing? No. Three years after their divorce was final, she was still wrangling with the IRS about her ex-husband’s underreported income.

“Sign here Honey” takes on a totally different meaning if you’re participating as a financially intimate partner.

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