There is a lot that goes in to planning a wedding, but one item couples should remember to consider is how their new status will affect their taxes. A little preparation before your first joint return can make tax season smooth sailing.
Consider your new filing status.
Whether you married on New Year’s Day or Christmas Day doesn’t matter. Your marital status on December 31st determines your filing status for the entire tax year. Generally, married couples must file as either married filing jointly or married filing separately. The IRS Interactive Tax Assistant can help determine which status is best for you.
Check your withholding.
Officially becoming one household changes your overall financial picture. With their new filing status in mind, both spouses need to check their withholding as soon as possible. Most taxpayers can use the Tax Withholding Estimator provided by the IRS. If adjustments are necessary, submit a new Form W-4 your employer. For those with more complicated tax situations, consult a tax professional.
Notify the Social Security Administration.
Marriage often means a name change for one or both spouses. Ensure you are issued a new Social Security Card bearing your new legal name before filing your tax return. A name/Social Security Number mismatch will flag your return and hold up any refund. If your address also has changed, report it to the USPS and they will update the IRS.
Shop for benefits.
If both spouses are offered benefits through their employers, they can choose the most tax-advantaged or valuable benefits from each. Marriage is generally a qualifying life event, allowing you to enroll in benefits within a certain window outside of the open enrollment period.
Notify the Health Insurance Marketplace.
If you receive advance payments of the premium tax credit, you must report changes in circumstance to the Health Insurance Marketplace. Certain changes may affect the amount of tax refund received or tax owed. You must also notify the Marketplace if you move out of the area covered by your current Marketplace plan.
A great marriage takes a lot of work. Your tax planning doesn’t have to when you have a Bacon & Gendreau professional. Ask about our comprehensive financial and tax planning services.