As a numbers guy, I'm always focused on the dollars and cents of life so it’s nice to be reminded of what we’re working towards (especially when it’s an event like a wedding)! Sadly, once the cake and champagne have been consumed, and the DJ
shuts off the music, we have to be transported back from this magical place and back to reality. With that reality comes taxes and challenges that a newly married couple must face. Once the honeymoon is over, it’s time to start getting serious about your finances as a couple, which includes getting your tax situation in order. Remember that your marital status is determined by your status on December 31. That means if you marry on December 31, you are considered married for the whole tax year. As the year draws to a close, and as you consider your new married filing jointly status, here are five tips to keep in mind:
1. Change Your Name With the Social Security Administration: Changi
ng your name on your Social Security Card is step one. You’ll want the name the Social Security Administration has to match the name on your tax return, and if you have changed your name as a result of the marriage, you need to make sure that is reflected with all of the proper agencies. You need to fill out and file a Form SS-5 with your local Social Security Administration office. You’ll receive a new card, but your Social Security number will remain the same. If you didn’t change your name as a result of the marriage, there is no need to file with the Social Security Administration.
You’ll want to change your name at the SSA before you try to change it on your driver’s license or any other documents. It can save you a lot of time because the SSA document can be used as proof for the license, which is then used as proof for everything else (utility bills, banks, credit cards).
2. Double Check Your Tax Withholding: Now that you have a new tax status, it’s important to review your tax withholding. Does your new status make you eligible for more tax deductions or does your combined income with your spouse put you in a higher
tax bracket? If so, you might need to change your withholding allowances. T
3. Double Check Your Filing Status: In most cases, most married couples see a tax benefit when they file as married filing jointly. However, depending on your individual tax situation this year, it might make sense to see which filing status (married filing jointly or married filing separately) gives you the biggest tax refund.
4. Look at ALL Your Possible Tax Breaks: If you file jointly, your spouse’s tax breaks are yours as well. Make sure that you review your tax breaks from the past year. If you just got married, you might be able to take advantage of your spouse’s generous charitable donations to help lower your bill. Consider investment losses, dependent care credits, education credits, mortgage interest, and other tax breaks. Go back through the finances for both of you and identify your joint tax breaks – and see if you have time to rack up a couple more tax breaks before the end of the year.
5. Make Some Money Saving Tax Moves Together: Now that you are a married couple, there are a few smart money moves you can make together by December 31 to further boost your tax refund. If joining your lives has caused you to outgrow some of your closets already you can donate your clothes and get a tax deduction. You both may also be able to maximize your 401Ks, lowering your taxable incomes and boosting your first tax refund together.
These are just a few of the tax tips I’d give my newly married friends. Getting married soon? What things are you looking forward to most?
Source: 5 End of the Year Tax Tips for Newly Married Couples |(intuit.com)