We''re newlyweds with a question for Accountants/Tax Preparers

[goldenstar]

We got married about a month ago and are figuring out how to merge our finances. DH has a great accountant and we don''t know how we will file our taxes next year. The accountant will do the numbers both ways to see what is best (jointly vs separately). We can call her about the following question but I wanted a quick and dirty answer today.

In order to keep our options open, does it matter how we hold our bank accounts and deposit our money? Specifically, should we put our paychecks in our separate accounts and pay household bills out of a joint account? I ask because logistically it would be easier for us to deposit paychecks into a joint account and then transfer money into our separate accounts for personal spending/saving. Would this second scenario make it hard for us to be flexible come tax time?

Your help is much appreciated!

 

[Skippy123]

It doesn''t really matter as long as when your bank gives you 1099 Int, you give it to your accountant; just save all those forms that say important tax information for the accountant/tax preparer. It is okay to have separate accounts, do whatever works best for you.

 

[Allisonfaye]

I think it is very difficult to transfer money from joint to separate accounts and vice versa. I opened an online savings account and it was the first joint account DH and I had in 7 years of being together. It was a nightmare. I don''t think it will affect you tax wise, one way or the other, unless you are earning huge amounts of interest income.

I think you find what system works best for you. Since DH and I married late in life, we each had our routines. He made 3 times my salary and I moved into his townhome that he bought prior to us getting married. He paid the household bills and I paid other bills but he could easily cover them all and then some, but I didn''t want to feel like I was livng off him and I was making decent $$. As things evolved, he makes more $$ and I am now a SAHM, we both maintain our separate bank accounts. He used to pay the bills but I took over because he works a lot more hours and travels a lot more and things were getting missed. In this day and age, you can''t be late on a bill by 1 second, and there was no planning of finances taking place. As long as the bill could be covered, DH was fine. But I don''t think that is proactive enough and I took over paying the bills. He balances his checkbook each payday. Any additional checks that we receive (dividends, gifts, etc) get deposited into my account. It all goes to the same place but DH doesn''t want me to feel that I have no money to my name, which is really sweet of him. I have brokerage accounts in my name, but since I am not earning a paycheck, I don''t have ready cash.

 

[goldenstar]

hmmmm.... so recordkeeping-wise, the IRS isn't gonna care whose salary paid for what expense? I guess that is my main question.

If filing separately ends up being better for us, will it be a problem that all our money is all co-mingled and we can't tell who paid for what?

 

[Skippy123]

Date: 6/3/2009 5:16:01 PM
Author: goldenstar
hmmmm.... so recordkeeping-wise, the IRS isn''t gonna care whose salary paid for what expense? I guess that is my main question.

If filing separately ends up being better for us, will it be a problem that all our money is all co-mingled and we can''t tell who paid for what?

Do one of you have a business?? Or are you both just given a salary? sorry to ask these questions but I feel like I am missing something. If you both just get a salary it shouldn''t matter unless you do bookkeeping for the business; in that case I would ask your accountant.

 

[goldenstar]

I''m an independent contractor, would that be similar to having your own business? I get a check and there are no withholdings. I''m new to the working world (was formerly a full time student) and I''ve only been doing what I do since the beginning of the year. DH has a salary.

Thanks Skippy, looks like I need to call up the accountant.

 

[diamondseeker2006]

I don''t think the IRS cares about your checking accounts. Every account bearing interest is going to have a statement of the interest paid at the end of the year. If you file separately, then you''d add the interest from the accounts in your name to your income, and vice versa. I am not sure what you do with a joint account if you file separately, but in actuality, I know of NO married couples who file separately.

We have multiple accounts and transfer money online all the time. So your idea of deposting all in the main joint account and then transferring some to individual accounts is just fine.

 

[diamondseeker2006]

Date: 6/3/2009 5:36:00 PM
Author: goldenstar
I''m an independent contractor, would that be similar to having your own business? I get a check and there are no withholdings. I''m new to the working world (was formerly a full time student) and I''ve only been doing what I do since the beginning of the year. DH has a salary.

Thanks Skippy, looks like I need to call up the accountant.

I''ve had some money like that before, and you have to file a schedule C as part of your tax return, and you''ll also have to pay Social Security taxes.

 

[LAJennifer]

Date: 6/3/2009 5:16:01 PM
Author: goldenstar
hmmmm.... so recordkeeping-wise, the IRS isn't gonna care whose salary paid for what expense? I guess that is my main question.


If filing separately ends up being better for us, will it be a problem that all our money is all co-mingled and we can't tell who paid for what?

It makes no difference how your money is spent. Also, it is almost never in your favor to file separately. My accountant says there are usually only 2 reasons to do so - 1) going through a divorce 2) one hiding assets from the other.

 

[D&T]

Date: 6/3/2009 5:36:00 PM
Author: goldenstar
I''m an independent contractor, would that be similar to having your own business? I get a check and there are no withholdings. I''m new to the working world (was formerly a full time student) and I''ve only been doing what I do since the beginning of the year. DH has a salary.

Thanks Skippy, looks like I need to call up the accountant.

as an independent contractor with no withholdings- you''ll be getting a 1099 and not a normal w2s, you really need to set aside some good money to pay your taxes, I would at the most set aside 20% of your pay in an account and not touch that until tax time rolls around, unless you have lots of "business" related expense/loss to offset your earned income.

 

[goldenstar]

Date: 6/3/2009 10:22:42 PM
Author: D&T
unless you have lots of ''business'' related expense/loss to offset your earned income.

Oh yes, I will have money set aside to pay taxes, but I also do have plenty of business related expenses to deduct. I''m in an advanced degree program that will help me maintain and improve my skills in my current work. I researched the rules on this and I am certain that at least some of my education related expenses will be deductible. What I do counts as my "trade or business" and I will definitely meet the criteria to have deductions.

 

[strmrdr]

Date: 6/3/2009 5:36:00 PM
Author: goldenstar
I''m an independent contractor, would that be similar to having your own business? I get a check and there are no withholdings. I''m new to the working world (was formerly a full time student) and I''ve only been doing what I do since the beginning of the year. DH has a salary.


Thanks Skippy, looks like I need to call up the accountant.

Keep a separate business/consulting account that any business money flows into.
A good accountant should tell you the same thing.
Make sure that any business related expenses and only business related expenses are paid out of that account and pay yourself into a different account for non-business use.
It will make your accounting much easier.