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Red flags on income tax returns may signal that a divorce is near

On Behalf of | Feb 8, 2020 | High-asset Divorce

During tax season, a married individual may uncover signs that indicate a spouse plans on filing for a divorce. Accountants generally take notice when couples who usually file income tax returns jointly as a married couple suddenly change their status to separate filings. A change in tax filings may reveal that one spouse has a motive to begin dissolving a marriage.

As reported by CNBC, reviewing an income tax return may disclose some red flags when a spouse attempts to hide a portion of his or her income. Filing schedules reporting capital gains, interest or earned dividends generally mean that a spouse made a profit on stock investments. In Kentucky, both spouses have a right to investment profits earned during a marriage unless an agreement between the two individuals states otherwise.

A change made to a spouse’s W-2 form at work may show how much more of his or her paycheck goes toward an employer-sponsored retirement plan. If a spouse does not know about the contributions to the plan, it may mean that an individual is setting up an income arrangement to retire on his or her own. During a divorce in Kentucky, however, a non-working spouse has the legal right to receive a portion of a working spouse’s retirement fund.

Because family court judges in the Bluegrass State divide property by fairness, a spouse attempting to hide ownership of assets may complicate the divorce proceedings. He or she may not have a say in how the judge divides assets when there is an intentional attempt to conceal them. Failing to disclose income or assets under oath may also be a criminal offense, as reported by Reader’s Digest.