Most of us would prefer not to be reminded, but we are right in the middle of tax season, meaning it’s time to start gathering documents and think about setting aside some time for completing our tax returns.
While there’s a natural inclination to view tax returns as the product of a painfully dull and exceptionally frustrating process, experts suggest that those who are in the midst of a divorce may what to consider changing their view and start seeing them for what they are: a potentially valuable investigative tool.
Indeed, experts indicate that the jointly filed federal tax returns currently gathering dust in a desk drawer or filing cabinet can not only provide some very valuable information in those divorce cases where spouses suspect one another of concealing assets, but also save considerable money otherwise spent on special investigators.
By way of example, they point to a few documents that spouses can look for within past 1040s that may provide some major clues as to the existence or whereabouts of concealed assets.
- Schedule B: This document requires filers to set forth the names of brokerage companies, banks, mutual funds or other sources of dividend or interest income, as well as provide answers about any foreign trusts transactions or financial accounts held in foreign nations. (Even if a filer doesn’t have a Schedule B, an amount of interest and dividend income less than $1,500 must still be reported on the first page of the 1040, perhaps suggesting that income-earning assets are at least owned and held somewhere).
- Schedule E: This document requires filers to share losses or income from estates/trusts, rental property, royalties, S corporations and partnerships.
- Schedule D: This document requires filers to capital gains and losses derived from the sales of stocks, fund shares and other assets.
While the discovery of these documents might not provide clear evidence of hidden assets, say experts, they can nevertheless serve as an effective starting point for any investigators ultimately retained, meaning you’ve done at least some of the work for them.
If you are considering a divorce and would like to learn more about property division matters, consider speaking with an experienced legal professional who can outline the law and answer your questions.