Taxing Taxing, Part 27
Client: “Before we get started, I’ve got a question for you.”
Me: “Go ahead.”
Client: “I just got married…”
Me: “Last year, or since New Year’s?”
Client: “Last year.”
Me: “Okay.”
Client: “My spouse doesn’t make any money.”
Me: “Is she disabled?”
Client: “No.”
Me: “Okay.”
Client: “Can I claim my spouse as a dependent?”
Me: “Since you’re legally married, as of December 31st, you’re considered married for the full year.”
Client: “Okay.”
Me: “As such, you can do something better than claiming your spouse as a dependent. You can claim your spouse as a spouse, and file jointly.”
Client: “What does that mean?”
Me: “Well, first it means I’m going to need to have your spouse come in and sign your taxes too.”
Client: “Can we file without her?”
Me: “Yes, but you’re not going to want to.”
Client: “Why not?”
Me: “As a married person, you have to choose between two, technically three, filling statuses, and one of them is terrible. The other two are pretty great, but you don’t qualify for one of them.”
Client: “Why don’t I qualify?”
Me: “Did you live with your spouse any day in the last six months of the year?”
Client: “Yes.” *With a ‘duh’ look.*
Me: “So you can’t file head of household.”
Client: “What’s head of household?”
Me: “A side track, I’ll explain that to you after I explain Married Filing Joint.”
Client: “Okay.”
Me: “Married filing joint lets you and your spouse add your income together and be taxed in a lower tax bracket as a result.”
Client: “What does that mean?”
Me: “It’s difficult to explain, and it’s easier to simply show. In essence, you’ll be taxed at a lower rate than you otherwise would be for every dollar of your income. The more different your and your spouse’s income is, the more money you save. Since she doesn’t have any income, you’re going to save a lot. Can I put your taxes together and show you what the different filing statuses do to your taxes?”
Client: “Okay.”
I do the taxes and show the difference.
Client: “Wow, that’s great! I want that one! That’s the one I want! Can we finish now?”
Me: “Unfortunately, I still need your spouse’s signatures. If you want, you both can come in to sign together, or you can sign now, and your spouse can come in to sign later.”
The client leaves happy, but unfinished.
Next Client: “Before we get started, I’ve got a question got you.”
Me: “Go ahead.”
Next Client: “I just got married…”
This conversation is so common that I once had this exact same conversation five times in a row, practically word for word.
There’s about a one in three chance their spouse will come back on their own to sign, and a two in three chance I need to call the client in April and remind them that we still need signatures. Male clients need to be called slightly more often than female clients. Same sex partners need to be called for a reminder much less often than opposite sex partners.
Initially, interrupting the client to ask the year and if the spouse is disabled is deliberate, as it gets the client in the mindset to listen to me. If I don’t do that, it doesn’t work as well.
Deliberately pausing for the client to interrupt me and for the client to say “okay” also sets up the flow.
Related:
Taxing Taxing, Part 26
Taxing Taxing, Part 25
Taxing Taxing, Part 24
Taxing Taxing, Part 23
Taxing Taxing, Part 22
