Divorce Accounting – Why Your CPA May be More Important than Your Divorce Attorney
By Houston TX CPA Jim Trippon, on the web at www.CPAHoustonTX.com
Divorce is never easy. But when there is a lack of clarity regarding the financial position of the warring party, the situation needs urgent attention. This means your CPA assumes center stage. Often, the male member is in charge of family finances and may not divulge the entire range of investments while the divorce proceedings are on. A CPA can unearth this information using several professional techniques.
The first stop for a CPA is obviously the tax returns. This document can reveal most of the details regarding the finances of a spouse. Issues regarding payment of excess taxes relief for which can be sought over the coming years, refunds due to overpayment and its implications on family finances are important aspects which can only be analyzed by a CPA.
In case of family businesses which are not listed, the process of assessing the real worth of the enterprise can be challenging. Valuation of such family enterprises needs a professional who intrinsically understands business processes. This job can only be performed by a qualified CPA.
Another aspect which needs closer examination is investments in shares and real estate. This may involve vacation homes and investment property. Only a CPA would be able to unearth the true value of the shares and stocks held by either spouse. Valuation in such cases can be tricky and may need assistance of a valuator. Real estate investments mean involvement of Banks. Property rates may be distorted and undervalued. Unearthing the true value of real estate property can be complicated process. A CPA would be invaluable under such circumstances.
Retirement plans are an area which requires close scrutiny. It is the most important aspect requiring a thorough understanding of tax laws, government policies, incentives and different retirement plans. The retirement plans offered by the employers as well as by spouses in individual capacity have to be studied carefully. Since these plans have long term implications, they need to be addressed in their totality. Depending on the kind of retirement plan, they can be impacted by share prices which are likely to fluctuate dramatically over the long term. This makes present valuation of retirement benefits difficult and an involved process. This requires assistance of a qualified CPA.
It often happens that the earning member of warring couple would attempt to hide their real income. This may take the shape of undisclosed sources of income and a distorted cash flow declaration. A CPA has the necessary experience to dig out the details of hidden assets and income from various documents and public sources.
A divorce means separation of finances and the settlement reached during the divorce proceedings can have a huge impact on your future. Under normal circumstances the financial settlement is not negotiable at a future date. The irreversibility of judgments should be understood clearly. This would automatically compel spouces to think through the financial issues and take professional help from qualified CPAs.
About the Author: Jim Trippon CPA is the founder of J.M. Trippon & Company, PC a CPA firm in Houston, Texas that works with Houston families and business owners. For more information, or for help with divorce related accounting or tax reporting, please contact Houston TX CPA Jim Trippon at 713-661-1040 or visit our website at www.CPAHoustonTX.com.