The Purpose of Your Accountant

Many people are confused about the purpose of accountants given tax software and so on. To get the biggest benefit for the fees you pay, you need to understand what your accountant can do.

The Purpose of Your Accountant

An accountant is a licensed profession who has gone to hell and back to gain their designation. The testing for the certification is beyond brutal. If an accountant is certified, it means they are extremely versed in the tax code, finances, and tax issues.

Many people are under the mistaken belief that accountants simply provide tax return preparation services. The stereotypical view involves a person dropping off their receipts a month before tax returns are due and the accountant doing the best he or she can to prepare a tax return while limiting the amount of money you owe the government. This occurs, but people are wasting money if this is how they are using their accountant.

Accountants have expertise in the tax code. You should use this. Ideally, an accountant will aware of all aspects of your financial life. They should also be aware of significant events in your private life, such as the fact you are about to have a child. The reason this is important is it gives the accountant the ability to solve your tax mystery.

Solving a tax mystery simply refers to an accountant figuring out the best way to limit your taxes. As you know from police shows on television or mystery novels, finding as many clues as possible is the way to solve the mystery. The accountant needs to do the same with you and you need to help them. Each part of your finances represents a clue to solving the mystery of how to cut your tax bill.

Once an accountant has all the clues, he or she can do their job. They will give you specific direction on the steps to be taken to save money on your tax bill this year. Equally important, they will give you advice on how you are going to save taxes in future years. Depending on your situation, they may even recommend a long-term tax strategy for stuffing away money to pay for your kids’ college tuition or your retirement.

The purpose of using an accountant is not just to put tax returns together. They put together tax strategies to save you money this year, the next and throughout your life.

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Battling the IRS

There was once a song about battling the law and losing. Fortunately, battling the IRS is possible and sometimes inevitable.

Battling the IRS

There comes a time when many Americans must take action against the IRS. The IRS can come down swiftly and without mercy against taxpayers for issues ranging from simple mistakes to genuine tax evasion. When such a situation occurs, usually in the form of an audit and followed by possible federal prosecution, it becomes necessary to stand up to the IRS. As many experts will tell you, knowing the right steps to take and doing things the right way can actually make battling the IRS prove to be a very valuable thing.

Every year, honest, tax-paying Americans worry that their income tax return will end up being audited by the IRS. In fact, the number of audits has increased quite significantly in recent years, lending its hand even further to the worry and stress. Audits can lead to major fees and even criminal prosecution. Needless to say, such a situation can become ugly very quickly.

However, many Americans don’t realize that they can fight the IRS. And, not only can they fight, but often times they can emerge with some sort of victory. In fact, recent studies have shown that over 41% of Americans who took their cases to the IRS’s appeals division won at least some degree of relief, while others had their penalties wiped out completely. Not only this, but countless numbers of other Americans have fought cases against the IRS in district courts and also emerged victorious.

What this means for the average American is that the IRS shouldn’t worry you too much. Obviously, an audit can be very scary and can occur at any time. However, as long as you did file your taxes in honesty, they are many venues you can look to for help. Just do some research, online or offline, and find a good tax lawyer to represent you. Whatever steps you take, do NOT talk to the IRS yourself. Your statements are evidence against you and you may inadvertently provide evidence the IRS has no right to obtain.

You will be surprised at your own chances of defeating the IRS and having your penalties reduced or even eliminated. Battling the IRS is something that can prove to be a very valuable tool for many Americans looking for tax relief.

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10 Years and Counting: Points to Consider as You Approach Retirement

If you’re a decade or so away from retirement, you’ve probably spent at least some time thinking about this major life change. How will you manage the transition? Will you travel, take up a new sport or hobby, or spend more time with friends and family? Should you consider relocating? Will you continue to work in some capacity? Will changes in your income sources affect your standard of living?

When you begin to ponder all the issues surrounding the transition, the process can seem downright daunting. However, thinking about a few key points now, while you still have years ahead, can help you focus your efforts and minimize the anxiety that often accompanies the shift.

Reassess your living expenses

A step you will probably take several times between now and retirement–and maybe several more times thereafter–is thinking about how your living expenses could or should change. For example, while commuting and other work-related costs may decrease, other budget items may rise. Health-care costs, in particular, may increase as you progress through retirement. Try to estimate what your monthly expense budget will look like in the first few years after you stop working. And then continue to reassess this budget as your vision of retirement becomes reality.

According to a recent survey, 38% of retirees said their expenses were higher than they expected.1

Keeping a close eye on your spending in the years leading up to retirement can help you more accurately anticipate your budget during retirement.

Consider all your income sources

First, figure out how much you stand to receive from

Social Security. In early 2016, the average monthly retirement benefit was about $1,300.2  The amount you receive will depend on your earnings history and other unique factors. You can elect to receive retirement benefits as early as age 62, however, doing so will result in a reduced benefit for life. If you wait until your full retirement age (66 or 67, depending on your birth date) or later (up to age 70), your benefit will be higher. The longer you wait, the larger it will


You can get an estimate of your retirement benefit at the Social Security Administration website,

You can also sign up for a my Social Security account to view your online Social Security statement, which contains a detailed record of your earnings and estimates for retirement, survivor, and disability benefits. Your retirement benefit estimates include amounts at age 62, full retirement age, and age 70.

Check your statement carefully and address any errors as soon as possible.

Next, review the accounts you’ve earmarked for retirement income, including any employer benefits.

Start with your employer-sponsored plan, and then consider any IRAs and traditional investment accounts you may own. Try to estimate how much they could provide on a monthly basis. If you are married, be sure to include your spouse’s retirement accounts as well. If your employer provides a traditional pension plan, contact the plan administrator for an estimate of that monthly benefit amount as well.

Do you have rental income? Be sure to include that in your calculations. Might you continue to work? Some retirees find that they are able to consult, turn a hobby into an income source, or work part-time. Such income can provide a valuable cushion that helps retirees postpone tapping their investment accounts, giving the assets more time to potentially grow.

Some other ways to generate extra cash during retirement include selling gently used goods (such as furniture or designer accessories), pet sitting, and participating in the sharing economy–e.g., using your car as a taxi service.

Pay off debt, power up your savings

Once you have an idea of what your possible expenses and income look like, it’s time to bring your attention back to the here and now. Draw up a plan to pay off debt and power up your retirement savings before you retire.

Why pay off debt? Entering retirement debt-free–including paying off your mortgage–will put you in a position to modify your monthly expenses in retirement if the need arises. On the other hand, entering retirement with a mortgage, loan, and credit-card balances will put you at the mercy of those monthly payments. You’ll have less of an opportunity to scale back your spending if necessary.

Why power up your savings? In these final few years before retirement, you’re likely to be earning the highest salary of your career. Why not save and invest as much as you can in your employer-sponsored retirement savings plan and/or IRAs? Aim for maximum allowable contributions. And remember, if you’re 50 or older, you can take advantage of catch-up contributions, which enable you to contribute an additional $6,000 to your 401(k) plan and an extra $1,000 to your IRA in 2016.



Manage taxes

As you think about when to tap your various resources for retirement income, remember to consider the tax impact of your strategy. For example, you may want to withdraw money from your taxable accounts first to allow your employer-sponsored plans and IRAs more time to potentially benefit from tax-deferred growth. Keep in mind, however, that generally you are required to begin taking minimum distributions from tax-deferred accounts in the year you turn age 70½, whether or not you actually need the money. (Roth IRAs are an exception to this rule.)

If you decide to work in retirement while receiving Social Security, understand that income you earn may result in taxable benefits. IRS Publication 915 offers a worksheet to help you determine whether any portion of your Social Security benefit is taxable.

If leaving a financial legacy is a goal, you’ll also want to consider how estate taxes and income taxes for your heirs figure into your overall decisions. Managing retirement income to result in the best possible tax scenario can be extremely complicated. Qualified tax and financial professionals can provide valuable insight and guidance.4

Account for health care

In 2015, the Employee Benefit Research Institute reported that the average 65-year-old married couple would need $213,000 in savings to have at least a 75% chance of meeting their insurance premiums and out-of-pocket health-care costs in retirement. This figure illustrates why health care should get special attention as you plan the transition to retirement.

As you age, the portion of your budget consumed by health-related costs (including both medical and dental) will likely increase. Although original Medicare will cover a portion of your costs, you’ll still have deductibles, copayments, and coinsurance. Unless you’re prepared to pay for these costs out of pocket, you may want to purchase a supplemental Medigap insurance policy. Medigap policies are sold by private health insurers and are standardized and regulated by both state and federal law. These plans cover certain specified services, but offer different combinations of coverage. Some cover all or part of your Medicare deductibles, copayments, or coinsurance costs.

Another option is Medicare Advantage (also known as Medicare Part C), which allows Medicare beneficiaries to receive health care through managed care plans and private fee-for-service plans. To enroll in Medicare Advantage, you must be covered under both Medicare Part A and Medicare Part B. For more information, visit

Also think about what would happen if you or your spouse needed home care, nursing home care, or other forms of long-term assistance, which Medicare and Medigap will not cover. Long-term care costs vary substantially depending on where you live and can be extremely expensive. For this reason, people often consider buying long-term care insurance.

Policy premiums may be tax deductible, based on a number of different factors. If you have a family history of debilitating illness such as Alzheimer’s, have substantial assets you’d like to protect, or want to leave assets to heirs, a long-term care policy may be worth considering.5

Ease the transition

These are just some of the factors to consider as you prepare to transition into retirement. Breaking the bigger picture into smaller categories and using the years ahead to plan accordingly may help make the process a little easier.

1 2016 Retirement Confidence Survey, Employee Benefit Research Institute

2 Social Security, Monthly Statistical Snapshot, February 2016

3 Note that if you work while receiving Social Security benefits and are under full retirement age,your benefits may be reduced until you reach full retirement age.

4 Working with a tax or financial professional cannot guarantee financial success.

5 A complete statement of coverage, including exclusions, exceptions, and limitations, is found only in the LTC policy. It should be noted that carriers have the discretion to raise their rates and remove their products from the marketplace.

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Valuable Tax Deductions for your Vehicle You Can’t Afford to Miss

Is your business missing out on valuable tax deductions you can take for the use of your personal vehicle for business purposes?If you haven’t done so already, you should definitely beat a path to the door of your local office supply store and pick up a notebook for logging the mileage you drive to conduct business—and be sure to log the miles you drove to buy it!

Not taking the trouble to do this is like letting your pricey gasoline flow onto the pavement instead of into your tank.

Even if you work at home most of the time, miles you’ve driven to purchase office supplies, buy stamps or mail packages, and other errands for your business can translate into big tax deductions. With fuel costs soaring, you are literally throwing money down the drain if you are not keeping track of this mileage and taking the deductions for it to which you’re entitled as a business owner. And the first entry you need to make is the beginning mileage on the odometer as of January. You’ll also want to make sure that you keep track of all your automobile expenses associated with that personal vehicle that you’re using for business.(See why in my article “Valuable Tax Deductions for your Vehicle You Can’t Afford to Miss”).

The dramatic surge in fuel costs has not been lost on the IRS. Of course, gasoline prices began to edge up shortly after the beginning of the war in Iraq; but the devastation wrought by Hurricane Katrina prompted the IRS to offer a valuable money-saving solution for business owners. (If you live outside the U.S.A. you should check your tax authority’s website for similar provisions.)

Last year,for 2005, the IRS increased the standard mileage rate for the use of a vehicle (car, van, or truck) by 3 cents a mile, to 40.5 cents a mile for all business miles driven. However, in the wake of Katrina, that rate was increased further to 48.5 cents a mile for the business miles driven in the months of September, October, November, and December, 2005.

This increased mileage rate ended with the end of 2005. The new mileage rate for 2006, effective January 1, is now 44.5 cents per business mile driven. You can maximize this deduction if you’re careful to consolidate business and personal errands. For example, I wait until I need to go to the post office to ship a package for my business to stop to at the drug store and supermarket right next door to pick up groceries. What would have been “dead” mileage becomes a deductible business trip, as long as you’ve logged your business purpose in your mileage logbook.

In addition, for both 2005 and 2006, the IRS also encouraged Katrina-related charitable relief activities by granting higher rates for miles deductible and miles reimbursable driven for such activities.

Of course, the use of these mileage allowances can be rather complicated. For example, you cannot take additional deductions for business use of an automobile to which you have already applied the Modified Accelerated Cost Recovery System (MACRS), after claiming a Section 179 deduction for that vehicle that your business purchased directly.

And if you’re using a personal vehicle for your business, don’t forget to calculate the percentage of total miles for the year that you travel for business purposes. At the end of 2006, you’ll note the year-end odometer reading in your mileage logbook and subtract from it the odometer reading that you recorded this month. Then you’ll add up all miles driven for your business that you have recorded and divide it by that total mileage to calculate the percentage of total miles you used for your business. If it turns out that 30% of your total mileage on that personal vehicle was for business purposes, you can deduct 30% of *all* your expenses for maintaining that vehicle: not only fuel, but all trips to the garage for routine maintenance or special repairs as part of your business expenses for the year.

The devil is in the details, as always, of course. You will want to consult your tax accountant on how best to apply the rules to your situation. If you prepare your tax returns yourself, you can get the details directly from the IRS website: Examine the fine print closely: You’ll find that there are limits on what percentage of business use can be claimed for a personal vehicle, no matter what your actual numbers might be; so if your actual business mileage is greater than 75 per cent of your total mileage, you might be better off purchasing a separate vehicle dedicated to business use. If you’ve taken the care to structure your business correctly–using a corporation, limited liability company, or other stand alone entity–you and your business will benefit from even greater deductions.

(C) Copyright 2006 Azur Pacific Associates. All formats and media, known and unknown. All Rights Reserved.

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Financial Advice for the Newly Divorced

If you find yourself amongst the recently divorced population, you may be feeling not just the loss of a partner, but also the absence of the second paycheck. Chances are pretty good that you have lived your life based on two incomes, and now that you are the sole provider there are some changes that will need to be made. First thing is to figure out what you can live on by compiling your bills and adding them up, along with your weekly food and gas expenses.

If your rent or mortgage is more than you can handle, you can search out either a smaller more affordable apartment or if obligated by a mortgage, you can try to refinance or put the home on the market for sale. Selling your home is likely to yield you a profit which you can put into savings.

There are some quick things you can do to help you through the first year, such as reducing your cable and cell phone bills. Many of us have more channels than we watch, and now would be a good time to check to see what you are paying for and remove any channels or extra cable boxes that you do not need. Your cell phone bill can be brought down to basic usage, removing any extra features and also choosing a plan with fewer minutes.

Food shopping will take some getting used to, especially if you have been in a long relationship. You will probably want to either buy smaller packages of things such as meat, or freeze the balance if you have gotten them on sale. Always make a list and use coupons, along with checking local flyers for the best deals. Eating at home and bringing your lunch to work will save you from putting extra strain on your wallet.

If you find that after doing everything humanly possible you still do not have enough to live on, then you may want to take on a part-time job to offset your expenses. This may be harder, especially if you have children to provide for. However, nothing is impossible and part-time jobs can be done at home, online.

Changing your lifestyle is hard enough without having to go through a divorce. Now that it is just you (and your children if you have them), you will have to alter your budget and spending habits to sustain your lifestyle. Cutting back where necessary will give you greater flexibility with your budget.

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Financial Advice for the Newly Married

Congratulations on finding the love of your life and pledging your commitment to each other! Now that the honeymoon has passed and you have begun to adjust to your new life together, it is time to set yourselves up for a long and successful marriage together. You have the advantage of starting out prepared for what life may throw you.

Set up a budget by sitting down together and listing all of your bills along with any weekly expenses. If you have come to the table with debt obtained prior to your marriage, you will want to consolidate this debt and pay it down as quickly as possible.

Credit cards, while a great way to cover unforeseen expenses, can create a life full of unwanted debt. It is too easy to use them and many people have gotten in the habit of using them for nearly everything right down to their morning latte. Interest is charged on your balance each month, so avoid using a credit card as a habit. Instead, establish one card that will stay tucked away in your wallet, to be used only if absolutely necessary.

A savings account should be high on your list. This will get you in the habit of putting away for your vacations, large purchases and eventually retirement. By starting small and setting up a savings account, you will create a nest egg. Your nest egg can be used to buy a house, start a family or save for large purchases. This savings account will also prevent you from using credit cards in times of need.

Use only cash for purchases. This cannot be stressed enough. Starting your life together by using cash for your purchases will do two big things for you. Firstly, you will get to see just how far your money really goes. Secondly, by having to pay cash you are more than likely going to think about each purchase, as once the wallet is empty you will not have any money left to spend.

When it comes to a new marriage, it is common to have some financial difficulties in the beginning, especially if you did not live together before you got married. By establishing a budget and healthy spending habits in the beginning of your marriage, you are essentially preventing fights over money. If you have little to no debt, you will be able to live the life you want and enjoy activities with each other in your new marriage.

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How to Calculate Your Own Personal Net Worth

Whether you are curious or have a specific reason for calculating your own personal net worth, there are many factors that you have to take into consideration. Knowing your personal net worth can help you plan for events such as retirement or setting up your will. Calculating your personal net worth is not difficult.

To calculate your personal net worth, you will need to list all of your assets. Your biggest assets will be any homes or property that you may own. Include any homes or properties that are currently under mortgage because they will count toward your equity. Vehicles count as assets as well, and should be listed after your home or land.

Liquid assets are assets that are easily converted into cash. Liquid assets include cash, bank accounts, retirement accounts and any other investment account such as a certificate of deposit. These assets should be calculated after your equity assets. Personal belongings and antiques should be included as well. Typically, items that carry more than a $500 value should be listed as an asset.

After calculating your assets, it is necessary to calculate your liabilities. Liabilities include all debts owed. Examples of debts include mortgages, student loans, personal loans and credit cards. These liabilities should be deducted from the sum of your total assets. The remaining balance will be your personal net worth.

Do not despair if your personal net worth is a negative number. As the years pass, you will see that negative number become positive as you pay off your liabilities. If you do not see any improvement in your personal net worth after comparing it over several years, you may wish to speak to a financial planner and determine the best course to increase your net worth. Keep in mind that overinflating assets will look good on paper, but it will not give an accurate picture of your finances.

Calculating your personal net worth should be done on a consistent basis, usually once a year. It is important to calculate your personal net worth for several reasons, mainly preparing for retirement. If you are not seeing a change in your personal net worth over the course of a few years, take a look at the bigger picture and figure out where to eliminate debts.

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Financial future as a graduation gift? It’s easier than you think!

As you begin to shop for the new graduates in your life, consider the case below and think about giving them a step in the right financial direction. While many advisers look for Millionaires (I don’t mind working with them either ha-ha) I would love to woIMG_0716_-graduation-gifts-webcopy-1030x687rk with someone just starting out.  I have been though many of the life changes they are about to experience. I can help them plan effectively!

Last week I had an interesting meeting on my schedule. It was with a daughter of long time clients. Now this alone was not the interesting part. I have had these meetings before, they usually show up as part of a favor to the parents to talk about credit card debt while at school or help fill out a fasfa. This meeting was different. This girl was not just dependent of her parents. She was the client. This was her annual review to go over a plan, we implemented a year ago. Again, not an abnormal meeting for me to have on my schedule, especially in the summer.

What was interesting is the way this girl became a client in the first place. As a graduation present when she graduated from a prominent and very expensive Ivy league school, her parents bought her a meeting with their financial advisor.

When we first met for the fact finding meeting (the where are you now and where would you like to be meeting) she flat out told me that she was only meeting to make her parents happy and she thought this was the worst graduation present she had received, “by far.”

Reluctantly we discussed where she was currently (swimming in some serious Ivy league debt) and where she wanted to be in 1 year, 5 years and 10 years. We developed a plan to save an emergency savings fund along with refinance her student loans (there were 6 of them) into one consolidated loan for interest rate relief as well as ease of paying. We discussed how to allocate her new employer’s 401k as well as how much to contribute, but still be able to fund her goals.

After a few meetings (she never missed one! I was definitely thinking I might never see her again after the first one ha-ha) I could see her attitude change and she actually looked forward to coming in and implementing the plan we developed together.

The meeting last week was so satisfying for both of us as she saw the benefits of planning and is exactly where we planned to be or even a little ahead.

So as you consider gifts for a graduate in your life, please consider a meeting with a financial advisor (hopefully me, but any good one willing to work with someone just starting out, there are not too many of us). The graduate might not think it is the best gift now, but when they realize where they are in a year, 5 years, 10 years in comparison to their friends, your gift will be the most valuable gift they received.

Kevin Murray is a financial advising, tax accountant, whose office is located in Wilbraham, MA. While he works with clients of all means and ages, he especially enjoys working with individual and couples who are just starting out. He has been through many of the life changes these clients are about to experience and can truly help them plan effectively. He can be reached at  When Kevin is not working you will see him at various playgrounds and pools throughout Western MA spending time with his most important clients Christa (wife of 7 years), Jameson (6), Adalyn (4), Maggie (yellow lab) and Chase (chocolate lab).

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Start Planning Now for Next Year’s Taxes

You may be tempted to forget all about your taxes once you’ve filed your tax return. Do not give in to that temptation. If you start your tax planning now, you may avoid a tax surprise when you file next year. Now is a good time to set up a system so you can keep your tax records safe and easy to find. Here are some IRS tips to give you a leg up on next year’s taxes:

Take action when life changes occur.  Some life events can change the amount of tax you pay. Some examples that can do that include a change in marital status or the birth of a child. When they happen, you may need to change the amount of tax withheld from your pay. To do that, file a new Form W-4, Employee’s Withholding Allowance Certificate, with your employer. Use the IRS Withholding Calculator tool on to help you fill out the form.
Report changes in circumstances to the Health Insurance Marketplace.  If you enroll in insurance coverage through the Health Insurance Marketplace in 2015, you should report changes in circumstances to the Marketplace when they happen. Report events such as changes in your income or family size. Doing so will help you avoid getting too much or too little financial assistance in advance.
Keep records safe.  Put your 2014 tax return and supporting records in a safe place. If you ever need your tax return or records, it will be easy for you to get them. For example, you may need a copy of your tax return if you apply for a home loan or financial aid. You should use your tax return as a guide when you do your taxes next year.
Stay organized.  Make tax time easier. Have your family put tax records in the same place during the year. That way you won’t have to search for misplaced records when you file next year.
Think about itemizing.  If you claim a standard deduction on your tax return, you may be able to lower your taxes if you itemize deductions instead. A donation to charity could mean some tax savings. See the instructions for Schedule A, Itemized Deductions, for a list of deductions.
Stay informed.  Subscribe to Murray Tax Services Blog to get emails about tax law changes, how to save money and much more.

Planning now can pay off with savings at tax time next year.

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Tax Issues Related to Marriage

What are tax issues related to marriage?

If you’re married (or about to be married), financial planning is certainly important. It’s also important for you to be aware of the income tax ramifications of your decisions. Although there are a number of tax issues related to marriage, you should pay particular attention to your selection of an income tax filing status. Thorough familiarity with the filing status rules applicable to married couples requires some knowledge of the rules for innocent spouse relief and injured spouse claims. Along with filing status, married couples might wish to know how to perform a second income analysis, which measures the after-tax benefit of both spouses working.

A same-sex couple legally married in a jurisdiction that recognizes their marriage will be treated as married for federal tax purposes, even if the couple lives in a jurisdiction that does not recognize same-sex marriages . However, marriage does not include registered domestic partnerships, civil unions, or similar formal relationships recognized under state law.

Why is filing status so important?

Your filing status is important because it determines, in part, the deductions and credits available to you, the amount of standard deduction that you may be entitled to, and your correct amount of tax. Therefore, you need to know which filing statuses are available to you and which one will best fit your needs. There are five possible filing statuses:

  • Single
  • Married filing jointly
  • Married filing separately
  • Head of household, or
  • Qualifying widow(er) with dependent child

For tax purposes, whether you’re considered married or unmarried depends on a number of rules and your legal status as of the last day of the tax year.

What is innocent spouse relief and what are the rules for injured spouse claims?

Although many married couples opt to file their tax returns jointly, it is wise for you to become familiar with both the advantages and disadvantages of joint filing. Generally speaking, if you sign a joint return, you take full responsibility for the accuracy of the information contained in your return. Therefore, if your spouse intentionally underreports his or her income, you, too, could be held liable if the IRS sends a deficiency notice with accompanying interest and penalties.

In some cases, however, you can be relieved of responsibility for your spouse’s errors. This relief is known as innocent spouse relief. If you file a joint tax return, it’s also possible that the entire tax refund due on your return will be used to offset certain debts of your spouse, including student loans, taxes, and child support arrearages. Because it may be inequitable for you to lose your portion of the tax refund simply because your spouse owes money, the IRS allows you to file an injured spouse claim (in some cases) to claim your money.

What is a second-income analysis?

Another decision facing many married couples today is whether both spouses should work outside of the home. This decision often arises when a couple has children or when a retiree collecting Social Security considers a re-entry into the workforce. If you wish to consider whether a second income is advisable, you need to consider the personal ramifications, as well as the financial and tax aspects of your decision. A second-income analysis involves an evaluation of the net benefit derived from a second income, with a particular emphasis on the tax cost associated with the second income.

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