Divorce can bring out the worst in people, especially when it comes to money. Some people might try to hide assets, thinking they can pull a fast one. But here’s the thing: tax returns can be a goldmine of information if you know where to look. Let’s dive into how you can use these documents to uncover hidden treasures during your divorce.
Why Tax Returns Matter
Tax returns aren’t just for the IRS. They’re a snapshot of someone’s financial life, and they can reveal a lot more than you might think. When you’re going through a divorce, these documents can help you verify income from all sources, identify assets that might not have been disclosed, and spot discrepancies that could point to hidden funds.
The Art of Reading Between the Lines
Now, let’s get into the nitty-gritty. Here’s what to look for in those tax returns:
Schedule A – Itemized Deductions This section can reveal property taxes paid on unknown real estate, mortgage interest on undisclosed properties, and charitable donations from hidden accounts.
Schedule B – Interest and Dividends Keep an eye out for interest from bank accounts you didn’t know about and dividends from undisclosed stock holdings.
Schedule C – Profit or Loss from Business For business owners, this is crucial. Look for unexplained business expenses that could be personal and sudden drops in income that might indicate hidden profits.
Red Flags to Watch For
Sometimes, it’s not what’s in the tax return that’s suspicious – it’s what’s missing. Keep an eye out for these warning signs:
- Missing schedules or forms
- Significant changes in income or deductions from year to year
- Lifestyle that doesn’t match reported income
- Large tax refunds or payments without clear reasons
Getting Professional Help
Tax returns can be complicated, especially if you’re not a numbers person. That’s where professionals come in handy. A good financial advisor can spot irregularities you might miss, know which questions to ask about suspicious entries, and help you understand the implications of what you find.
What to Do With Your Findings
So you’ve combed through the tax returns and found some fishy business. What now? First, document everything and keep detailed notes of what you’ve found. Then, consult with your attorney. They can advise on how to use this information legally. Your lawyer might recommend subpoenaing additional financial records. Most importantly, stay calm and don’t confront your spouse directly about your findings.
Work With Us
At Purposeful Wealth Advisors, we’ve seen our fair share of financial hide-and-seek during divorces. We know what to look for and how to help you get the full financial picture you deserve. Our team can review tax returns with a fine-tooth comb, identify potential areas of concern, and work with your legal team to uncover hidden assets.
Don’t go into your divorce negotiations blind. Let’s team up to make sure you have all the financial facts. Give us a call, and we’ll set up a time to review your situation. With Purposeful Wealth Advisors on your side, you can face your divorce with confidence, knowing you’ve left no stone unturned in the search for hidden assets.
Remember, knowledge is power – especially when it comes to your financial future. Let’s work together to make sure you get your fair share in your divorce settlement.
