You’ve put a tremendous amount of time and effort in the months            leading up to your wedding day to ensure everything is perfect so               that your special day goes off without a hitch. Taxes are probably the       last thing on your mind, however, they really are something you should    address. The following are some basic tax considerations for                     newlyweds:

 

Name and Address Changes

When you file your income tax return, your name(s) and Social Security number(s) on your return must match your records at the Social Security Administration (SSA). Therefore, if you legally change your name because of marriage, you must report your name change to the SSA. To report your name change, you must file Form SS-5 (Application for Social Security Card). Please also advise your tax professional of the change. Electronic filing of returns with outdated name information could delay your refunds.

If your address changes, there are several methods to notify the IRS of your new address:

1. Use your new address on your tax return

2. File Form 8822, Change of Address

3. Mail a signed written statement

4. Oral notification by telephone

 

Withholding Tax Changes

Now that you are married, you and your spouse’s income is combined, which may push you into a higher tax bracket. As such, you will want to check the amount of withholding if both you and your spouse are employed. You will need to provide your employer with a new Form W-4, Employee’s Withholding Allowance Certificate. You can use the IRS Withholding Calculator online tool or ask our office for assistance to determine the correct amount of withholding needed for your new filing status.

 

Changes in Filing Status

For Federal tax purposes, if you are married during a given year, you are considered “married” for the entire tax year. For example, even if you wanted New Year’s Eve wedding and are married on December 31, 2016, you are considered married for the entire tax year 2016.

Generally, the tax law allows married couples the option of filing a joint tax return or separate returns. Typically filing jointly is more beneficial than married filing separate. On the other hand, recent changes in tax law have reinstated many of the provisions that cause the taxes from a married filing joint return to be higher than what the two individuals returns would be if unmarried (the “marriage penalty”).

 

Married Filing Jointly

When filing a joint return, a married couple must report their combined income and deductions. Keep in mind you can file a joint return even if one spouse has no income or deductions. Additionally, the standard deduction may be higher for joint filing, and you may qualify for a variety of tax benefits that would not otherwise apply.

It is important to know that filing jointly means you will both be held accountable for all the information reported on your tax return. You are jointly liable for all taxes, interest, and penalties incurred on income earned by your spouse. Yet, tax problems from one spouse prior to marriage should not affect the other spouse.

 

Married Filing Separate

Filing separate tends to result in higher taxes for most people because there are a number of special rules. Separate filers are often excluded from tax breaks that joint filers are eligible for, such as the Earned Income Credit, credit for childcare costs and deductions for education expenses. Restrictions also mandate that either both or neither of the separate returns use standard deduction rules.

Other limitations include only one parent may claim their child as a dependent, even if both parents are equally contributing to the child’s support, and if one spouse itemizes their deduction, the other spouse cannot claim the standard deduction.

Further, if you and your spouse choose to file separate returns and you live in a community property state, such as Arizona, the community property laws of your state will govern how you calculate your income on your Federal income tax return. You will have to determine your community income and your separate income. For more information on community property laws, refer to IRS Publication 555 or contact our office.

 

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