Tax season is a good time for couples to get on the same page regarding household finances. Now that you’ve filed your 2018 taxes, take time to think about how you can better work together with your spouse as you navigate 2019. Particularly for those who file jointly, it’s important for both spouses to understand the full financial picture – including how much income was earned during the year and from what sources, and how much and what type of expenses were incurred.
Filing taxes together, while not the most romantic venture, can help couples take stock of their dreams and plans together and further commit to saving for the future. For example, if both partners are aware of the types of expenses that can be deducted, they each can work on ways to maximize those deductions throughout the year. Call us. We may be able to help you maximize tax-efficient opportunities to help reach your long-term goals.
Another reason it’s important for both spouses to understand the household finances is that, regardless of who takes the lead at tax time, both spouses can be impacted by any potential negative outcomes. For example, a spouse who files a fraudulent return may be the only one prosecuted, but that hardly helps the innocent spouse if the government seizes assets for back taxes.1
Some common financial secrets couples may hide from each other include having loads of debt or a low credit score, a past bankruptcy, habitually not paying bills on time or the inability to stick to a budget.2 This is why it is important for couples to start having money conversations even before they get married – whether it’s a first marriage or their fifth – and to continue having these conversations throughout their marriage.
But discussing finances in a relationship can be a tricky business. If one spouse doesn’t want to share this role, it’s important to find out why. Does he prefer to have all the control? Does she think it will be too difficult for both to agree on financial decisions? Does he not want to be bothered about money? Is she hiding income or spending habits?3 Knowing what’s at the heart of any money disagreements can help you find a resolution together.
While money is the number one issue that married couples argue about, and the second leading cause of divorce, after infidelity, you can build a strong marriage and a strong financial relationship.4 Open communication is the biggest key. Find a time when you’re both relaxed and sit down and discuss your goals and dreams. Work on your budget together — respecting each other’s differences, strengths and weaknesses — to ensure you’re both traveling in the same direction.5
Content prepared by Kara Stefan Communications.
1 Walter Pavlo. Forbes. Feb 25, 2019. “Ten Things Every Spouse Of A White Collar Defendant Should Know.” . Accessed Feb. 25, 2019.
2 Natalia Lusinski. Bustle. Oct. 25, 2017. “What Are Financial Red Flags In A Relationship? 11 Signs Your Partner’s Spending Habits Are Worrisome.” . Accessed Feb. 25, 2019.
3 Miriam Caldwell. The Balance. Dec. 22, 2018. “When Your Spouse Won’t Participate in a Financial Plan or Budget.” . Accessed Feb. 25, 2019.
4 DaveRamsey.com. “The Truth About Money and Relationships.” . Accessed Feb. 25, 2019.
Our firm does not provide, nor is any statement contained herein intended to provide, tax advice. All individuals are encouraged to consult with a qualified tax professional prior to making any decisions about their personal situation.
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