Thursday, September 8, 2011
It's Turdsday. Shit I've Learned about Divorce #4: Money, Taxes, Joint Accounts, Credit Cards and Other Horrors
When my marriage broke up, I had all the financial trappings of a big fat life: a CPA who prepared my taxes,a financial advisor, a team of divorce lawyers. Imagine my surprise when the end of 2008 rolled around and I filed my first individual tax return in thirty years. Not one of those professionals had any inkling of how naive I was. I had no idea of how naive I was--cuz that's what naive is. You don't know what you don't know.
You were supposed to being paying quarterly taxes all year, the CPA said.
Yes, alimony is taxable at the full rate, the divorce attorneys said.
You need to come up with how much money?!?! the financial planner said.
I don't have any control over the tax code, someone else said.
Holy shit, I said.
Paying my income tax and the penalties I accrued from failing to pay estimated quarterly tax wiped out every cent I had saved from my rather fat alimony that first year on my own.
I've recovered from the tax debacle of 2008. But I managed to get myself into the penalty box again in 2009 when I goofed up my quarterly payments to the State of California. Here on the left coast of the country, a quarterly payment is not really a quarter. You pay nothing in the third quarter. That's because you were supposed to pay 40% in the second quarter. And, just by the way, the first and fourth quarter, you pay 30%. Um. For all I know it's that way in every state in the union. But I didn't know what I needed to know when I should have known it.
I didn't know what to do with the joint checking accounts. After my alimony began, I quit using them. But it seemed weird to take my name off them. Someone else's name was still on them, and the accounts were being used by him. Maybe there was some strategic smart attorney something I didn't know, and I should leave things alone.Hmmm, the banker said. He could overdraw this account and you could be liable. That didn't happen. Thank god. But it could have.
When you get a credit card with someone, you might be just a simple little authorized user. It's a pain, because if you call the credit card company for any reason, you're just a big fat nothing. I'm sorry, they'll tell you. We have to speak to the owner of the account. But I'm his wife, you'll say. Who? Oh, that doesn't matter, they'll say. But if you get divorced, there's still a lot of fancy dancing to get yourself off the account. And what goes on with that account can affect your credit rating.
If you're not just an authorized user,you're probably a co-owner of the account. You can't get your name taken off. Period. We don't recognize divorce, the credit card company will say. They'll go on to say that the agreement you entered into with the credit card company supersedes divorce. You are liable even if you shredded the card long ago. Now you have to pay your divorce lawyers to help you settle this one.
Health insurance is at the top of my list of "other horrors." I won't even go into it. But think about your situation. Your health and how you insure it, and how all of that will change when you are divorced.
I wish you the best of luck.
Just telling you some shit you might want to know.
My divorce advice disclaimer: I am not an attorney, a paralegal, or a legal secretary. Nor do I possess any legal education or credentials of any kind other than having been married to an attorney for three decades and immediately thereafter involved in divorcing him for the next four years. My advice is based solely on my own experience and falls under the broader life heading of Damn It, If Only I'd Known Then What I Know Now.