With 2022 starting and love in the air, we thought this would be a perfect time for a few tax tips for newlyweds. Here are 5 helpful tips if you just tied the knot.
Attention newlyweds! It may not be your favorite wedding present, but here’s an overview of tax considerations to go along with that new marital status you’re wearing. Love and marriage—it’s a timeless pairing, sort of like death and taxes. While we eagerly anticipate the first two from the moment we comprehend them, we seek to endlessly delay the latter pair’s arrival.
Let the Government Know If you or your spouse is changing a last name, add one more addressee to the wedding announcement list: the Social Security Administration. Complete form SS-5 to receive a new Social Security card.
Unless you were already living together, either you or your new spouse has a new address. Let the Internal Revenue Service know about the move by completing Form 8822, Change of Address. Take care of both of those items, in that order. Doing both before filing your next tax return could save you some heartache from database and mismatch problems, especially if when you e-file your tax return.
Let Your Boss Know You probably took a bunch of days off for the wedding and honeymoon, so your direct supervisor likely knows of your nuptials. The next step is to inform Human Resources, because you’ll want the Social Security number and name on your W-2 to be accurate and match what should properly go on your tax return.
Consider Estimating Your Future Taxes Your new marital status directly affects your tax liability. If you both work, your marriage may very well push you into a higher tax bracket and costing you more money, thanks to the “marriage penalty.” On the other hand, it’s plausible that once combined you’ll have enough deductions to itemize – reducing your taxable income. In addition, there are tax deductions and credits that are only available to couples who file married filing jointly and not separately.
In the Eyes of the Internal Revenue Service, For What Period Am I Considered Married? The Internal Revenue Service takes a very simplified view of marriage. Your marital status for the entire year is determined based solely on your marital status as of December 31. You could get married and divorced multiple times during the year (not recommended solely to test this theory), but whatever your status is as of the end of the year is the status you must use to file for the entire year.
Should I File Jointly or Separately? In almost all cases, filing jointly will minimize your taxes. You should double-check to see if filing separately will save you money, but it is very rare that separate filings will save you on your taxes. The most likely successful scenario: one spouse with very low income and very high deductions and another with high income and little deductions.
Congratulations on your marriage!
Source: I Love You, You’re Perfect, Now Let’s File Jointly: 5 Tax Tips for Your New Marital Status | (intuit.com)