With wedding season peaking between May and October, many newlyweds will soon be settling into their lives together. No matter when you choose to say “I do” if you get married anytime on or before the last day of the year, you’re considered married for the entire year in the eyes of the IRS. So, if you’re tying the knot anytime this year, here are 5 key tax tips you need to know.
1. Discuss filing status.
Once you are married you have two options when filing your tax return: married filing jointly or married filing separately. This is an important decision to make since you can’t amend to change your filing status once you file jointly. Most people choose to file jointly, but for some couples, filing separately can result in a bigger tax savings.
Because there are many factors to consider, it’s best to speak to a tax professional before deciding. They can often prepare sample returns and use their knowledge of tax law to help you determine which option will allow you to save the most on your taxes.
2. Update any name or address changes.
If you change your name after getting married, it’s important to make sure you update your information with the Social Security Administration (SSA). When you file a tax return, the name on your return must agree with the name the SSA has for your Social Security number or processing could be delayed or prevented. You can file Form SS-5 to apply for a new Social Security Card to reflect the change.
Did you move in with your partner or find a new home together since filing your last tax return? If so, make sure you update your address with the IRS to ensure you’re receiving refunds, notices, and any other important mail to your new residence. Accurate information can also help avoid processing issues with your return. You can update your address using Form 8822.
3. Check your withholding.
Combining income with your partner’s may move you into a new tax bracket. Consider changing your withholding and file a new Form W-4 with your employer. You can use the IRS’s Tax Withholding Estimator or work with a professional to help you determine the correct amount of withholding.
4. Update your bank account information.
If you change your name and choose to have your tax refund directed deposited into your bank account, it’s crucial to update the name on that account as well. If you file your return under your new name but don’t update your bank account, you will be unable to use that account to receive your refund. Make sure your bank account, SSN and tax return all have the same identifying information to avoid issues.
5. Consult a tax professional.
With so many new changes in your life, you don’t need to spend time worrying—or worse, arguing with your spouse—about your taxes. Working with a professional can help you make informed decisions and reduce financial stress.
Padgett’s nationwide network of CPAs and EAs are here to help! Find an office near you today to get started with tax planning for your married life.