Taxes might be the last thing on your mind if you just got married. But taking some time to think about how marriage will affect your taxes may help you avoid unnecessary stress and headaches when it comes time to file. Here are five things to help prepare you in advance.
1. Filing Status
Married couples have the option of filing their taxes as Married Filing Joint or Married Filing Separate. Choosing one filing status versus another can significantly change the amount of tax you pay (or refund you may get). For example, if you earn much more than your spouse, Married Filing Joint may save lots of tax dollars. The greater the difference in your income, the greater the potential tax savings.
Like most things in life, there’s a BUT. If the combined income of you and your spouse puts you into a higher tax bracket, Married Filing Separate may save more tax dollars. How will you know which filing status is best for you? It’s easy and free! Just use ezTaxReturn to file both ways and learn your Balance Due or Refund Due. Then e-file based on which filing status saves you the most money, or gives you the biggest refund. It’s fast, it’s easy, it’s free to try!
2. Tax Withholding Allowance
A change in your marital status means you should give your employer a new Form W-4, Employee’s Withholding Allowance Certificate. If your spouse doesn’t work, you can claim an additional personal allowance. If your new spouse is bringing any children (new dependents) into the marriage, there are additional allowances you can take.
These allowances enable your employer to withhold less income, which puts more money into your paycheck. There is one important thing you should keep in mind: if you don’t withhold enough, you might end up owing the IRS at tax time.
3. Name Changes
Be aware that the names and Social Security numbers on your tax return and those on file at the Social Security Administration must be the same. If you or your spouse change your last name, you should go to the www.SSA.gov website to download the application for a social security card.
4. Change of Address
If you or your spouse change your address, make sure to let the IRS know by filing Form 8822, Change of Address. It’s also a good idea to go to the Official USPS Change of Address page, and tell your local post office as well.
5. Affordable Care Act – Change of Circumstances
If you chose your health insurance through the Health Insurance Marketplace and received an advance payment of the premium tax credit, make sure you notify the Marketplace that your family size has changed. This way you can be sure that you get the right type and the right amount of help.