Tax Tips for Newlyweds
We’re deep into the 2013 wedding season, and lots of folks are tying the knot. While the Internal Revenue Service is hardly on anyone’s mind as they celebrate, there are some important tax tips to keep in mind.
While it isn’t as customary these days as in the past, many women still take their husband’s name after they wed. It’s important that the names and Social Security numbers that you put on your tax return match your Social Security Administration records. If you change your name, report the change to the SSA as soon as you can. To do that, file Form SS-5, Application for a Social Security Card. You can get this form on their website, by phone or at your local SSA office.
If you are about to move in together, you need to let the IRS know your new address. File Form 8822, Change of Address. You should also notify the U.S. Postal Service to make sure that your bills and tax forms reach you. You can ask to have your mail forwarded online at USPS.com or report the change at your local post office.
If you work, report your name or address change to your employer. This helps ensure that you receive your Form W-2, Wage and Tax Statement, after the end of the year.
If you and your spouse both work, you should check the amount of federal income tax your employer withholds from your pay. Your combined incomes may move you into a higher tax bracket. Use the IRS Withholding Calculator tool to help you complete a new Form W-4, Employee’s Withholding Allowance Certificate. See Publication 505, Tax Withholding and Estimated Tax, for more information.
If your withholdings are too little, you have a hard time coming when you file for taxes. Paying too much and getting a return feels like a windfall, but in reality, you lent the government money for no interest. It’s best to get your withholdings in the right range.
If you didn’t qualify to itemize deductions before you were married, that may have changed. You and your spouse may save money by itemizing rather than taking the standard deduction on your tax return. You need to use Form 1040 with Schedule A, Itemized Deductions. You can’t use Form 1040A or 1040EZ when you itemize.
If you are married as of Dec. 31, that’s your marital status for the entire year for tax purposes. You and your spouse may choose to file your federal income tax return either jointly or separately in any given year. You may want to figure the tax both ways to determine which filing status results in the lowest tax. In most cases, it’s better to file jointly.
Getting married is a milestone in life and should play a role in every couple’s financial plan. Whether you are in the process of planning a wedding or are recently married, a trusted financial advisor can assist you in developing a road map to financial success as a couple.
AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty. For instance, the rankings this week measure the number of clients whose income is between $250,000 and $500,000 with that advisor. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.