Money 101: How To Do Your Taxes With Your Man
Money matters are one of the most common topics couples disagree on, so if you’ve never done taxes with your honey before, you might want to brace yourself. Since April 15 is right around the corner, we asked Ryan S. Himmel, CPA and founder of the personal finance website BIDaWIZ, for advice on how to do taxes as a couple without killing one another.
- Get On The Same Page: Money should most definitely be discussed before you say “I do,” but even if you and your spouse have talked about (and combined) your finances, taxes fall into tricky territory. “So many couples struggle with adopting the term ‘our taxes’ and instead use ‘my taxes,’ because of ego or the sensitive nature of finances,” Ryan says. “But it is critical for each spouse to know the other’s income, expenses, investments, benefits, and, of course, financial goals.” Throughout the year, be open with each other about what’s going on financially, and you’ll avoid unpleasant surprises when it’s time to prepare your taxes.
- Keep Tabs Before Tax Time: A little advance planning can take the headache out of doing taxes—and possibly help you avoid unnecessary arguments. Each quarter, make a point to review your finances, including overall budget, investments and retirement, deductions and credits, estimated taxes, and financial goals. Are you over or under what you had expected? And, perhaps more importantly, are the two of you on the same page? Monitoring your money also lets you know whether you should make big medical expenses, mortgage payments, and charitable donations before year-end, as certain spending could bump you up to a percentage of adjusted gross income that counts as a deduction. If spreadsheets aren’t your thing, Ryan suggests using a free online personal finance tracker, such as Mint or Thrive.
- Add It All Up: Tracking your every financial move can be tedious, but otherwise, you won’t know whether your best bet is itemizing or taking the standard deduction ($11,400 for married couples filing jointly). “The general guidance, which may seem obvious, is to claim the deduction that is larger,” Ryan says, though itemizing may make sense under certain circumstances, such as if you have a lot of mortgage interest.
- Go It Alone? Just because you’re married doesn’t mean you need to do everything with your spouse. Filing separately could be a better bet, depending on your circumstances, like if your spouse is facing severe financial hardships and liabilities or your spouse has very aggressive or risky tax behavior and has had prior audit issues with the IRS, says Ryan. “Keep in mind that if you are married filing jointly then you and your spouse are jointly liable for all interest and penalties,” he says.
- Make Decisions Together: As a single lady, you might have hired a particular accountant each April, but you shouldn’t necessarily go to the same tax preparer now that you’re married. “Don’t just pick the CPA that your husband or wife already uses because you don’t want to be confrontational,” says Ryan. “This is an important decision that both spouses should be comfortable with.” And before you select someone, verify that they have a tax or accounting license, Ryan advises.
The Money section and all articles within it are sponsored by Free Credit Report; however, the articles are all independently produced by The Frisky and the opinions and views expressed by the writers and experts are their own.