Divorcing couples are often required to disclose all sources of income to make certain they are divided equally and to calculate alimony. However, your ex-spouse could try to hide assets in a 1040 tax return.

What would motivate your soon-to-be-ex spouse to hide income in a tax return? Fear and greed are two common motivators. If you feel your spouse isn't being truthful, here are some tips to find hidden income using their 1040 tax returns.

Get Copies of Previous Tax Returns

Whether you file jointly or separately, you are entitled to request a free copy of tax returns from your accountant or the IRS. Tax returns should be kept for three years. If you filed separately, get them to sign a release form. If your spouse takes their time, you will have to file a motion with court.

Review Schedules A-E

Schedule A lists itemized deductions. Check this for mortgage interest payments that could mean they took out loans for properties. Lock box rental fees, gambling losses, property tax, and estate planning advice fees are other common deductions. It will also report how state and local taxes were paid, which could reveal an out-of-state income.

Schedule B shows interest and ordinary dividend income exceeding more than $400. Your spouse will have to list interest earned on bank accounts, bonds, and dividends. Be aware tax-free investments will not be listed.

Schedule C means your ex-spouse has a side business and must report profits and losses. They may have started this business to increase retirement deductions using the Keogh plan.

Schedule D lists capital gains on stocks, bonds, or real estate. It will show transaction dates and cost of the investment. Schedule E reports supplemental income and loss. This could expose rental properties, estates, trusts, and partnerships. 

Compare Income with Financial Affidavit

Compare the income from line 7 of your ex-spouse's returns to the expenses claimed on the financial affidavit. The living expenses should not greatly exceed the reported income. If living expenses are in access of income, your spouse may have purchased luxury items.

Look for Over Payments

Your ex-spouse could pay extra taxes to get a bigger post-divorce refunds and lower their net earnings that are used to figure support payments. If they are self-employed, the extra payments may be listed on line 63 as estimated tax payments. Check line 68 for requested extensions and payments and line 73 to determine if they had the IRS to hold refunds until the divorce is over.

A 1040 form can reveal a treasure trove of hidden assets. An experienced law practice like Tracy McMurtrie Luck & Associates can help you find more hidden assets.