For Love & Money is our weekly series exploring how we navigate one of the most intimate and rarely talked about aspects of our relationships: our finances.
In return for just not having to deal with the dreadfully boring process of calculating their tax returns, many people choose to gather every financial statement they can think of — be it proof of insurance, prior deductions, restructured mortgage papers or capital gains transactions — and dump them onto their accountant to figure out.
But perhaps this isn’t the smartest move. After all, you’ve just handed them reams of data about your life. And just by looking through your documents, accountants are able to suss out some things you might not want your buddy at H&R Block to know about — like where your financial life intersects with your personal life.
That’s right, accountants have all the clues to detect what’s going wrong in many relationships. To that end, I asked a few accountants about some of the relationship red flags they’ve seen when couples shared their personal information during tax season, as well as their advice for what to look for if you have concerns about financial infidelity. Here’s what they had to say…
A Major Shift to Cash Spending
“When one partner makes a sudden shift to paying for everything in cash, it’s worth looking into,” says Adam Sanders, a former auditor and current director of financial services firm The Relaunch Pad. “There are legitimate reasons for a switch like this, such as a credit card being lost, but it’s worth checking out because a sadly common reason is the desire to hide where and when they’re spending money from their partner.”
Hidden Gambling Problems
Speaking of being secretive about where money is being spent, accountants can often see when one partner is gambling behind their partner’s back. “In my experience, hidden gambling is one of the most common, yet assured, marriage killers in terms of finances,” says Lucia Jensen, a former accountant in Chicago. Whether it’s that they’re “spending money on the stock market, betting apps or buying crypto,” she tells me, “most spouses with a gambling problem that affects their finances will want to keep this a secret from their partner until it’s too late.” And unfortunately, by that time, “the gambling partner has driven their family into a financial mess.”
Using a Business Account for Clandestine Expenses
“Of course, nothing’s a smoking gun, and there’s a lot to be left to my imagination here,” begins Logan Allec, the founder of Choice Tax Relief. “But when I see periodic charges to a day-rate hotel for just a few hours during normal business hours running on the business credit card, and these charges consistently happen on the same days that the owner takes cash out of his business bank account, I have to wonder what’s going on.”
As a tax preparer, Allec says he’s “not paid to audit a client’s books,” so if the business owner tells him the hotel expense was for a business meeting, he has to accept that. “But I still retain my suspicions,” he continues. “Like when a client charged a meal at an upscale restaurant on Valentine’s Day to his business credit card, despite his Instagram showing him out to dinner with his wife on Valentine’s Day at a different restaurant.”
Allec says he pushed back on deducting the first dinner as a business expense, but the client insisted it was only a coincidence that they went out on Valentine’s Day to talk business. “He did not retain me the following year to do his taxes again,” Allec laughs.
Underlying Disagreements in Financial Goals
Beyond the numbers, Wendy Barlin, a certified public accountant and tax strategist in New York, says tax preparation forces many couples to have a conversation about finances that they’ve been avoiding. “Whether talking about house buying, car buying or other financial choices that affect taxes, I can feel the tension between spouses who don’t agree on even the fundamentals of where and how they live,” she tells me. “In prior years when I had an office, I would often need to bring out a box of tissues for clients because I’d see the extremely organized and financially diligent spouse get extremely frustrated with the other who’s less so.”
A Sudden Drop in Income
Whenever an accountant sees “a big drop in income coming from one partner, especially if the other partner isn’t aware of it,” Sanders says, that tends to be a major red flag. “Sometimes people hide the fact that they’ve lost or changed jobs the same way they try to hide money,” he says. “And whenever that happens, there’s a good chance that there are major relationship issues about to come to a head.”
Excessive Personal Spending
Per Michael Campbell, director of finance for Throw Deep Publishing, the most telling indicator for an accountant who’s filing taxes for a married couple is a large discrepancy in spending. “If one partner is spending a significantly larger amount of money in comparison to their partner, it could indicate that there are some large differences in the way that the two individuals view their finances and their financial plan,” Campbell explains. “Obviously, this difference in spending could eventually become a point of tension and conflict that could result in things unraveling down the road.”
After all, as he points out, and which punctuates everything above, “The number one reason for divorce is money and the problems that stem from it.”