Tax Refund

[safetobemeguy]

If the pending tax return is not mentioned in the settlement agreement is it fair game to bring up splitting in 6 months after I got the refund and 11 months after the divorce?  I paid most of the deductable expenses and charitable contributions.  I also had a much higher level of withholding from my pay.  This year without her I am getting $2200 back.  Everything the same last year I got $1000 back because she had her income underwithheld added to mine.

Don

[anniewalker]

Is the pending refund an individual or a joint refund?  Is it being direct deposited or is someone getting a check?
If it is individual, then it's a no brainer, it is yours.  If it's joint... you are going to need to divy up that money. 

I think the "fair" thing to do would be for both parties to input their information into a free online service (like TurboTax or TaxCut) and see how much they would get as a refund if they filed individually.  Say the refund is $4,000.  Harry puts in his info and he would have gotten back $3,000 filing individual.  Sally puts her info in and she would have gotten $500.  There is a difference of $500.  So, split it.  Harry gets $3,250 and Sally gets $750.  No harm, no foul. 

Once all the dividing is agreed upon, you may want to look into having both parties sign a statement about how all this went down, just to CYA.

[livealittle]

Is the pending refund an individual or a joint refund?  Is it being direct deposited or is someone getting a check?
If it is individual, then it's a no brainer, it is yours.  If it's joint... you are going to need to divy up that money. 

I think the "fair" thing to do would be for both parties to input their information into a free online service (like TurboTax or TaxCut) and see how much they would get as a refund if they filed individually.  Say the refund is $4,000.  Harry puts in his info and he would have gotten back $3,000 filing individual.  Sally puts her info in and she would have gotten $500.  There is a difference of $500.  So, split it.  Harry gets $3,250 and Sally gets $750.  No harm, no foul. 

Once all the dividing is agreed upon, you may want to look into having both parties sign a statement about how all this went down, just to CYA.

especially important

the IRS may come back a few years down the road and say you didn't file something correctly and you have to correct it now.  If you have this statement, then you can tell exactly what happened and go from there.   For example, Sally couldn't later say, "but Harry, you kept the whole refund!"

[safetobemeguy]

Well let's see.  She also did not pay the prep fee of $300, she paid nothing of the 150 due to NY State.  That leaves $600 up for grabs.  Now do you think you will get a CPA to do this for under $600 in NJ or should we just gift it all to the accountant and not make him work. 

I honestly never worry about the IRS calling me.  In 35 years they never have.  We both work for large entity's like the board of ed or a corporation.  Pay is all on the books, nothing at all tricky.  Deductions are all black & white.  I paid 30% more withholding on 10% more income.  Without the privilege of the joint return she would have owed money.  I have turbo tax for 05.  Maybe I should model it for her.  She is playing dumb like a fox.  It is not in the settlement so see what the judge says.

Don

[anniewalker]

Before I went to see what the judge says, I'd be crunching some numbers to show.
If I were in your shoes, I'd prepare "mock" returns showing what was paid by whom to the state, federal government, and accountants.  In addition you could show what refunds would have been entitled to whom.

Don't assume the judge is going to magically know how to mentally prepare a tax return during your short 15 minutes of time before the bench.  Document, show proof, spell it out.

And ~ good luck!