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Davis Brown Tax Law Blog


Tax Law Blog: Sharing Financial Responsibility at Tax Time - January 31, 2015

It's the end of January, and I imagine all of those tax documents are starting to arrive, including W2's and 1099's. For couples, maybe just one spouse handles the finances and taxes, whether by actually preparing them, or by organizing all the documentation to take to someone else to prepare. This year, consider sharing that financial knowledge with the other spouse.  If the partner that handles the finances becomes ill or passes away first, would the surviving partner know where to pick up the pieces?  For singles, it is possible only you, and maybe an accountant or advisor if you use one, are aware of your relevant financial information. If you use electronic filing for tax returns, you may not even have paper copies of your prior year tax returns which can often be used to “find” assets so to speak.  Could a family member or close friend take over, if needed?   Whatever your situation, it is important to keep good records so that someone else can pick up where you left off, if needed.  Make a late new year resolution to get your finances organized, not just for your own benefit, but for the benefit of the family you leave behind. Here are a few tips:

  • Keep a record of all financial assets, including investments, retirement plans, and life insurance policies. List the contact information for any advisors.
  • Note where any documents, such as a Will or prior year tax returns are located or stored.
  • Write down any user names or passwords (in a secure place) for any online accounts.
  • For couples, walk through the list of assets, what the accounts are used for, how bills are paid, etc.   This should help make sure both are on the same page regarding how finances are managed.
  • Don’t procrastinate when it comes to getting things organized. You are already digging through the files to work on your 2014 tax return, while you are in the middle of it, get organized, and make it a resolution to stay organized for 2015.