Tax season is in full effect, and it is likely that you are seeing and coping with the effects of poor administrative compliance on the part of your small business clients. Instead of bemoaning the fact that so many clients “don’t get it” use some of the time you’re spending on the return to prepare a list of administrative compliance items that the client needs to address. Then, set a (paid) planning appointment for later in the year to help the client address those items. If you do this, and if the client heeds your advice, next filing season more (if not always all) of the client’s administrative compliance will be in order by the time you start preparing their returns. It’s a win-win. Your client gets the opportunity to ensure that they are meeting administrative requirements that protect them from liability or penalties. You get cleaner paperwork (and peace of mind) moving into next filing season. Read on to learn more!
Divorce and Taxes
“Timalyn, Alyssa and I filed for divorce, and we will finalize everything before Thanksgiving. Does this change things for our taxes?”
“No! Can we wait until January 1?” were my initial thoughts. But then I realized that if this news blindsided me, the seemingly happy couple was probably also scrambling for answers. They were looking to me to be calm during an upcoming storm.
To give you some context, I had helped this family lower their back taxes by $16,000 and get a payment plan that worked well with their cash flow. Then, by implementing a few strategies they had just saved an extra $20,000 on their last tax return. We were planning on saving them even more money in upcoming years.
Then, that is when it happened. Divorce.
I never saw this happening, so I never prepared for it. But if it happened to me, it will happen to you. Clients divorce.
Some of the things we are going over today may seem obvious to you. But remember what is obvious to us as tax experts is not obvious to our clients, especially if they are going through a life-changing event such as divorce.
Here are four things you need to inform your client about when it comes to their divorce and taxes…