Let’s face it – tax returns can look scary at first. They have lots of boxes, numbers, and words that might seem confusing. The forms are ugly and complicated, and the rules are intimidating. If you have never filed your family’s taxes or had a reason to take a good look at your tax returns, you may be reviewing them for the very first time during your divorce.
But don’t worry! Think of a tax return like a treasure map. If you know what to look for, it can lead you to important information about money and investments.
Why Tax Returns Matter During Divorce
During a divorce, looking at tax returns is super important. They can tell you about:
- Money in bank accounts
- Investments like stocks and bonds
- Interest earned from savings
- Money earned from work or a small business
- Property that was bought or sold
Getting Your Tax Returns
Good news! You don’t need anyone’s permission to get copies of your tax returns. If your name is on the return, you have the right to see it. You can get your tax returns directly from the IRS (Internal Revenue Service). This means you don’t have to wait for your spouse to give them to you. (I show you exactly how to get them from the IRS in the Divorce Money Guide.)
Finding Hidden Money – It’s Easier Than You Think!
Would you believe that finding hidden bank accounts or investment accounts can be as simple as looking at the right lines on a tax form? It’s true! Here’s how to do it: Find Form 1040, your personal income tax return. Look at Page 1 and find these important lines:
- Tax-exempt interest
- Taxable interest
- Qualified dividends
- Ordinary dividends
If there are numbers on any of these lines, then you should check if there is a Schedule B in your tax return. This is where the treasure hunt gets exciting! Schedule B lists the names of banks and investment companies that paid interest or dividends. Look at the companies that are listed. Do you recognize all of them? If you see a bank or company name you’ve never heard of before, that’s a clue! It means there are accounts (with money in them!) that you didn’t know about.
Consider this a red flag that your spouse may be hiding money and assets from you. Why didn’t you know about this account? Maybe you did know about it and forgot, or maybe information just slipped through the cracks. Whether the account represents something shady or not, you still need to get information about it. Let your attorney know what you found, and he or she can send a subpoena to the company to get all the records for the account.
Important Tax Facts You Should Know
Here are some helpful things to keep in mind when it comes to taxes:
- Tax returns must be filed every year
- Your tax return should not be filed without your knowledge or your signature, but in this day and age of electronic filing, spouses often file without a partner’s consent
- The IRS keeps copies of your returns for seven years
- If you file jointly with your spouse, you both have equal rights to see the tax information
- Banks and investment companies must report interest and dividends to the IRS
- Hiding money from the IRS is against the law
Getting Help
Remember, you’re not alone in figuring this out. There are people who can help:
Tax professionals can explain anything confusing
- Lawyers can get information about accounts you discover
- The IRS has special forms to request old tax returns
- Financial advisors can help you understand investments you find
Why This Matters
Finding hidden money isn’t just about the money itself. It’s about being fair and honest during a divorce. Everyone has the right to know about all the assets in their marriage. Tax returns are one of the best tools for discovering the truth.
Following my simple instructions can help you find the truth about your money and may uncover secret accounts. And it’s easier than you thought! There are always clues to these accounts, and people who are hiding money from their spouses don’t realize that these clues exist. Let me show you more easy ways to find hidden money with the Divorce Money Guide.
