Finance Tax Time

With the tax filing date quickly approaching, you must prepare your taxes again, and on time. This time of year, finances are always a priority for us, but did the thought ever occur to you that cheating spouses are spending money without telling you?

“Once a cheat always a cheat” as the old adage goes. If they will cheat on you, count on it - Uncle Sam is next. “And this means possible IRS problems. The problem for most victims of infidelity is denial. Coping with powerful feelings of trust and mistrust keep many in the dark.

Cheating spouses account for millions of dollars each year in travel, gifts, phone charges, and more as they philander. Taking an assessment of your income and expenses columns, especially in the ‘miscellaneous category,’ will unearth cheating spouses’ wrongdoings.

Tax season can also serve as time for damage control. Start by investigating credit card and bank statements and phone bills - especially cell accounts. Next, turn your attention toward any disappearing acts or business trips during the past year. Make certain you don’t overlook holidays such as Valentine’s Day and Christmas and your spouse’s birthday. These events are just a few important dates to include as you audit your finances.

Each case depends upon the nature of the income, methods of payment, how and where assets are hidden. For example, does the potential exist for your spouse to hide assets through the assistance of a family member, business partner, or out-of-state relative? If your answer to any of these questions is yes, you might consider using spyware and a device called the Phone Accountant to track call data and trace email transactions. In some cases, computers may need to be forensically analyzed for erased data on the hard drive.

Another safeguard for anyone suspecting an affair is to check your credit report. Obtaining your credit report may provide information and evidence such as hidden credit history, accounts, or debts. This approach can be used to identify transactions your spouse made without you. Look for banking and routing information revealing any trails to hidden assets or financial surprises.

Use this tax season to secure your financial future, avoid debts, and verify the facts. A troubled relationship brings more than pain. It normally brings debt! You shouldn’t be the last one to know if your spouse is cheating on the government and you.

Bill Mitchell, Seven-Day Detective, is a licensed private investigator in South Carolina with more than four decades of experience. He can be reached at (864) 329-0530 or log on to http://www.sevendaydetective.com.

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Newlyweds and the recently divorced should make sure that names on their tax returns match those registered with the Social Security Administration (SSA). A mismatch between a name on the tax return and a Social Security number (SSN) could unexpectedly increase a tax bill or reduce the size of any refund.

For newlyweds, the tax scenario can begin when the bride says “I do” and takes her husband’s surname, but doesn’t tell the SSA about the name change. If the couple files a joint tax return with her new name, the IRS computers will not be able to match the new name with the SSN. This could result in tax assessments or even an audit since the IRS may be under the impression that you are simply evading taxes.

Similarly, after a divorce, a woman who had taken her husband’s name and had made that change known to the SSA should contact the SSA if she reassumes a previous name. Failure to take this action can lead to audits. Can you imagine going through an audit with your former spouse?

It’s easy to inform the SSA of a name change by filing Form SS-5 at a local SSA office. It usually takes two weeks to have the change verified. The form is available on the agency’s Web site, www.ssa.gov, by calling toll free 1-800-772-1213 and at local offices. The SSA Web site provides the addresses of local offices.

Richard A. Chapo is with http://www.businesstaxrecovery.com - recovery of business taxes through tax help and tax relief. Visit http://www.businesstaxrecovery.com/articles to read more business tax articles.

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Getting married is the greatest day for 50 percent of couples. The other 50 percent get divorced. Perhaps the marriage tax penalty has something to do with it.

Family Values - Hardly

For all the chatter from politicians about family values, it is ironic that the tax code actually penalizes people for getting married. At its heart, the tax code is designed to modify behavior. Deductions and credits are given in areas the politicians wish to promote and taken away in areas considered less positive. Home ownership is viewed as a good thing, so mortgage interest is deductible. Cigarettes are bad, so they are taxed like no tomorrow. If you buy this argument, one must wonder why married couples suffer under the tax code.

A recent study found that by getting married, couples are forced to pay roughly $1,500 in additional taxes. Known as the marriage penalty, one must wonder what the government is up to. Is it trying to promote family values or not? The numbers would seem to indicate not.

The marriage penalty is a nasty little development for newlyweds. The penalty occurs because married couples must pool their earnings when they report taxes. Typically, this means their pooled earnings move them into a higher tax bracket and they pay more taxes. For instance, assume husband makes $45,000 a year as does wife. As a married couple, their pooled income is $90,000 with the accompanying tax consequences. For really doomed couples, the combined income will actually kick in the alternative minimum tax. The AMT more or less voids many major deductions. In the tax industry, there is a nickname for this situation - the divorce tax.

The marriage penalty has existed for years, yet the politicians have failed to find a fix. They pay lip service to the idea, but no major changes have been made to fix the problem. The best they have come up with is doubling the standard deduction for married couples, but this has had little impact since most couples itemize their deductions.

It appears the marriage tax penalty is here to stay for the foreseeable future. One has to wonder why our family values President didn’t include a fix in his tax cuts.

Richard A. Chapo is with http://www.businesstaxrecovery.com - recovery of business taxes through tax help and tax relief. Visit http://www.businesstaxrecovery.com/articles to read more business tax articles.

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