Getting Married or Just Married? Tax Tips for Newlyweds
First off, congratulations on tying the knot! Many things in your life will change when you get married, and your taxes are no exception. Once married, you’ll need to choose your filing status, coordinate your benefits at each of your employers and adjust your withholdings appropriately. You’re probably concerned that getting married will cause you both to owe more income taxes than you paid when you were single because having two incomes suddenly puts you into a higher tax bracket, but the truth is, most married couples end up paying less tax.
If you get married by December 31st of the current year, tax laws consider you married for the full year. When you file your tax return immediately after the wedding, you’ll be filing as a married couple.
Here are some tax tips for newlyweds:
Update Your New Name
Ladies, if you’re taking your husband’s last name or hyphenating your last name with his, you’ll need to submit Form SS-5 to the Social Security Administration. This is how the IRS receives notification that you’ve had a name change. If you fail to do this, the IRS computers might not know who you are when you file your income taxes, and that can cause a number of problems (not to mention headaches!) that you can easily avoid by updating your name in the system.
Update Your New Address
Marriage typically results in at least one person moving to a new home, if not both people. Fill out and file IRS Form 8822 to notify them of your change of address as soon as possible. By the time you file your income taxes it should be updated and make things easier.
Check and Change Your Withholding Status
If both you and your spouse are employed, you’ll need to adjust your withholding from your paychecks. Use the IRS withholding calculator to figure out how many withholding allowances you deserve as a couple, and then decide how to divide that number up amongst both your paychecks. You’ll also need to update your W-4 forms to show that you are now married and not single.
Tax Filing Status
There is an option for married filing separately but in most cases, it will not lower your income taxes. The reason it doesn’t seem to help most people is that even when filing separately, both husband and wife have to itemize deductions or claim the standard deduction (you can’t have each person claim their deductions differently).
To see which option works best for you, married or married filing separately, you’ll want to run your tax return both ways to see how the numbers play out. The extra work and time spent doing this your first year married will help you decide which method offers the lowest tax bill or the highest refund for your situation.
If your spouse can be covered less expensively on your medical plan rather than each partner paying into their own health insurance, it makes sense to combine coverage â€“especially if the spouse declining health insurance with their own employer ends up getting a larger paycheck or other benefits in exchange! Perhaps the money saved on health insurance can be applied to a retirement account?
Child-Related Tax Breaks
Once upon a time, most couples got married before having children. If you’re more of the modern variety couple and have a baby and a wedding around the same time, you’ll also need to consider the tax implications of your child(ren).
There are child tax credits, credits for dependent care expenses or nannys, and education tax breaks which may apply to your situation and can offer deductions on your taxes.
Thanks to BackTaxesHelp.com for contributing this article.