I have a real-life scenario that is a good example of how taxes actually ended a marriage between a friend and her idiot husband. You have a spouse, we’ll call her “Jill,” who is making an average living at a regular 9–5 job and taxes are coming out of her paycheck. Every year she (they) get a little something back in a return. But not this year, all because of her husband “Jack.”
Jack has decided this year he’s going to start working freelance full-time and instead of paying his taxes quarterly, the way he is supposed to, he’s going to wait until the end of the year and pay it with a small penalty. This is a possible recipe for a disaster because Jack has displayed hints of not being the most financially responsible person, as he only thinks of what he can spend his money on now not what needs to be covered later (home repairs, the cost of having kids — which they haven’t done yet at this point). For now, they are a young couple with no kids but they still have bills and responsibilities.
Now, while there is absolutely nothing wrong with working freelance, someone has to pay the taxes on that income. You can’t make several thousand dollars and get to keep all of it. Nor can you expect your spouse to make up the difference tax-wise at the end of the year just because you want to keep everything you earned. But Jack thinks since he’s earning a little less than Jill, he should get to keep it all. Seriously? Seriously.
After a few months, Jill once again confronts Jack and asks him to cover the estimated tax costs of his income quarterly because that would be fair. Jill is already providing Jack with health and dental with her day job and has had to start covering more of the couple’s bills since he took on freelance work. Jill doesn’t think it’s right that she cover his share of the taxes too when Jack IS earning an income. Jack refuses. For some reason Jack thinks that he should not only NOT have to pay his share of the taxes at all on his freelance income, but that Jill should also split their tax return when they file. Um, Jack isn’t paying his share of the taxes but thinks it is fair to take half of whatever Jill paid. And since Jill makes more, he thinks she should cover the tax debt.
Jill explains to her idiot husband that taxes have to be paid on his freelance income, and as such, there will likely not be a return. They will owe. Jack shrugs his shoulders and goes about doing what he wants to do how he wants to do it, ignoring the impact his selfish bullshit behavior is having on his partner. Either Jack is an fool or Jack knows what he is doing and figures Jill will take care of the fallout. Figuring it is the latter, Jill begins to make preparations, but still wants to give her husband the benefit of the doubt — hoping he really isn’t this selfish and spoiled.
The couple argue constantly for months about money and how Jill is essentially going to be stuck paying not only her own income taxes but Jack’s as well, as they will ultimately have to claim his income and pay the difference in taxes on it. She’s also getting frustrated about covering more of the bills (because you have to eat and pay car insurance) while Jack doesn’t seem to care and insists he’s going to keep everything he earns. Jack still thinks he should still get half of the tax return that year when they file together.
As Jack implacably refuses to be responsible, Jill moves forward with her plan and adjusts the deductions on her paycheck to ensure there will be no tax return; she files and pays her share of the tax bill; and makes sure the IRS is aware of her husband’s entire freelance income. During this process Jill files for a divorce, thankful she has a prenup, because now she knows just what a spoiled, selfish, financially idiotic man she married. Jack has the balls to be shocked that Jill has moved out and filed for divorce and is peeved that she’s told the IRS exactly how much he really made working freelance. The taxes are resolved to the satisfaction of the IRS, the divorce is over in a couple of months, and the two never speak to one another again. It’s really sad too because as I recall they had been madly in love when they met and married. It wasn’t until some ‘true colors’ came out that things took a turn for the worse.
To this day Jack lives with his parents and Jill is living a happier life elsewhere.
Arguments over money is one of the top reasons couples get divorced. If there is an issue it needs to be addressed asap. Don’t dismiss or diminish your partner’s concerns about money. We can’t live on rainbow and hope people. Ultimately, someone has to pick up the tab.