Are you prepared for the tax adjustments that come with marriage?
Getting married is a significant life event, as well as one of the most gruelling processes you’ll ever experience! You can’t blame people for forgetting about mundane things like taxes when there’s so much going on, but you don’t want to be caught off guard.
Taxes are complicated enough on their own, and marriage brings a lot of changes to how you file your taxes. The last thing you want to do is begin your marriage with an audit!
Don’t worry, we’re here to assist you. Continue reading for 5 vital tax guidelines that every newlywed spouse should be aware of.
1. Status of Filing
Married couples can file their taxes as Married Filing Separate or Married Filing Joint. Choosing one file status over another might have a considerable impact on the amount of tax you pay (or refund you may get). For example, if you make significantly more than your spouse, Married Filing Joint may save you a significant amount of money in taxes. The wider the income disparity, the greater the potential tax savings.
But, like with most things in life, there is a BUT. If your combined income with your spouse puts you in a higher tax bracket, Married Filing Separate may save you more money. How are you going to know which file status is ideal for you? It’s simple and free! Simply use ezTaxReturn to file both ways and find out if you owe money or have a refund. Then, e-file based on whether filing status saves you the most money or provides the largest refund. It’s quick, simple, and completely free to try!
2. Allowance for Tax Withholding
If your marital status changes, you must provide your employer with a new Form W-4, Employee’s Withholding Allowance Certificate. You can claim an additional personal allowance if your spouse does not work. There are additional allowances you can take if your new spouse brings any children (new dependents) into the marriage.
These allowances allow your company to deduct less money from your paycheck, putting more money in your pocket. One thing to keep in mind is that if you don’t withhold enough, you may end yourself paying the IRS at tax time.
3. Name Modifications
Keep in mind that the names and Social Security numbers on your tax return must match those on file with the Social Security Administration. If you or your spouse change your last name, you should visit the www.SSA.gov website to obtain a social security card application.
4. Address Modification
If you or your spouse move your address, notify the IRS by completing Form 8822, Change of Address. It’s also a good idea to go to the USPS’s Official Change of Address page and notify your local post office.
5. Affordable Care Act – Circumstances Changed
If you chose your health insurance through the Health Insurance Marketplace and received an advance payment of the premium tax credit, tell the Marketplace if your family size has changed. This way, you may be certain that you are receiving the appropriate type and quantity of assistance.