FTR TAX TIP OF THE MONTH
HOW TO PROTECT YOURSELF FROM A SPOUSE’S TAX DEBT
EASY PEACH COBBLER
As you may know, if you live in Wisconsin, you are governed by community property rules. This means when you get married, you and your spouse share equally in any assets acquired or liabilities accrued during the marriage. The only exception is when you have a marital property agreement in place that specifically states each spouse is keeping their income and expenses separate. Why is this important? Well, even if you trust your spouse completely to do the right thing when it comes to your finances, they can still make mistakes. In the last several months, I’ve helped two couples with these problems. One person with financial problems was a husband and the other was a wife! In both instances, they accrued large federal and state income tax debts. In one scenario, the husband defaulted on a monthly installment agreement he’d set up with the state of Wisconsin, and his wife’s wages were garnished at 25% by the state two months later! Wisconsin does not mess around if you owe back taxes, especially if the taxes include employee withholding and sales tax. In the situation above, the husband told me before he got married that his wife was quite concerned about his business and the tax implications. I told him to meet with an attorney and discuss having a marital property agreement drafted, but he didn’t. You might think that a married couple filing tax returns separately will protect you from your spouse’s tax liability. Wrong! In Wisconsin, a marital property agreement has to be on file with the state and the couple must file their taxes separately for a spouse to not be liable for the other spouse’s tax debt. If you are currently married and do not have a marital property agreement, all is not lost. You can have an attorney create one now and send a copy to the state. The state will honor that agreement from the date they receive it going forward. Tax debt accrued before the state accepts the agreement won’t be covered, but new tax debt will be. If you have any questions about keeping tax debt separate or need help resolving a tax debt in place right now, please contact me for a free consultation.
Celebrate the end of summer — and peach season — with this simple and tasty peach cobbler! Inspired by MyRecipes.com INGREDIENTS
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1/2 cup unsalted butter
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1 cup milk
1 cup flour
4 cups peaches (fresh is best!)
2 cups sugar, divided 1 tbsp baking powder
1 tbsp lemon juice
Ground cinnamon or nutmeg to taste
Dash of salt
DIRECTIONS
1. Preheat oven to 375 F. In a 9-by-13-inch baking dish, add butter and place in oven. Remove when melted. 2. In a large bowl, combine flour, 1 cup of sugar, baking powder, and salt. Then pour in milk and stir until the mixture is smooth. 3. Pour the batter over the melted butter, but don’t stir! 4. In a pot, bring peaches, lemon juice, and remaining sugar to a boil. Stir constantly. 5. Pour peaches over batter, but once again, don’t stir! 6. Sprinkle with cinnamon and nutmeg, then bake at 375 F for 45 minutes.
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