Are you getting divorced? While many people in your situation may agree on the importance of having a divorce attorney, you may not realize the value of adding an accountant to your team of advisors. How can an accountant help during divorce negotiations? Here are four key ways.
1. To Confirm Assets and Expenses
Finances are usually a large part of divorce negotiations. In order to be successful in accurately dividing marital assets and determining what support may be appropriate, you need an accurate picture of both parties' finances.
A good accountant can analyze documents you or your spouse provide to ensure that everything is accounted for. This may include things like shared (or individual) bank or credit card statements, brokerage accounts and reports, income tax returns, and business financial statements or books.
2. For a Second Opinion on Taxes
If you weren't deeply involved in the preparation of joint income tax returns during your marriage, you should have a second look at them before the divorce. Because you are liable for what was put on the tax returns, you need to have confidence that everything was correctly prepared and filed with your spouse. An independent accountant can provide a second opinion and research any discrepancies.
3. To Determine Support
Alimony and other forms of financial support are important factors in successfully starting your new life. But to ask for the right support, you need to understand your own financial situation.
Accountants can help analyze things such as how much you can expect to earn from your portion of investments, the sufficiency (or insufficiency) of shared retirement accounts, and your expected earning power. With this information, you can work together to come up with the right amount of alimony to ask for as well as one-time lump sum payments.
4. To Minimize Tax Issues
All marital assets are not created equal when it comes to taxes. For instance, a Roth IRA and a traditional IRA—or a primary and secondary home—of similar value can have vastly different income taxes when withdrawn or sold. Additionally, an asset that has appreciated may be taxed much more than one of equal value that hasn't appreciated.
An accounting professional understands how each marital asset is affected by taxes and how you can avoid ending up with an uneven share of taxation after property division.
Could you use help in any of these potentially expensive areas of your divorce discussions? If so, make an appointment today with a qualified accountant. Together, your team will aid you in what may be the most important financial negotiations of your life. Contact an accountant for more information.