Getting married results in lots of changes, including changes in your tax status. If you recently got married or are planning a wedding, there are some important steps you need to take to avoid stress at tax time. Here are seven tips for newlyweds.
Report any name change to the Social Security Administration so your name and Social Security number will match when you file your next tax return. File a Form SS-5, Application for a Social Security Card, at your local SSA office. The form is available on SSA’s website at www.ssa.gov.
If you have a new address you should notify the IRS by sending Form 8822, Change of Address. If the IRS doesn't have your correct address, you may not receive correspondence or refunds sent by the IRS. You can download Form 8822 from the IRS website.
You should also notify the U.S. Postal Service when you move so it can forward any IRS correspondence or refunds.
Report any name and address changes to your employer to make sure you receive a properly completed Form W-2, Wage and Tax Statement, after the end of the year.
If both you and your spouse work, your combined income may place you in a higher tax bracket. In this event, not enough tax will be withheld from your paychecks and you can end up owing a big tax bill come tax time. You can use the IRS Withholding Calculator to determine if too little (or too much) is being withheld by your employers. You can adjust your withholding by filing a new Form W-4, Employee's Withholding Allowance Certificate, with your employer. You can fill it out and print it online and then give the form to your employer(s).
Your marital status on December 31 determines your status for the whole year. Married couples may choose to file their federal income tax return either jointly or separately in any given year. Usually it's best to file jointly because filing separately makes you ineligible for valuable tax credits, including those for child care and education, and the Earned Income Tax Credit. However, filing separately can save you money in some cases--for example, when one spouse has substantial uninsured medical expenses. Figuring the tax both ways can determine which filing status will result in the lowest tax.
Being married may give you extra tax savings opportunities. For instance, most people who don't work can't open IRAs, but a nonworking spouse can open a spousal IRA. This is a great way to save toward your retirement. Also, you and your spouse together may have enough deductions to make it worthwhile to itemize your deductions instead of taking the standard deduction.