Hello June! “Here Comes the Bride” and the IRS!
There is more to marriage than gifts, cake, champagne and a honeymoon. When you tie the knot, your tax status changes. Couples getting married need to know that after planning their nuptials, tax planning for their first tax return as a married couple should be on their checklist also. Here is some helpful information for newlyweds about how marriage may affect their taxes, and tips to make filing their first tax return together less stressful.
- Newlyweds should consider their filing status. After marriage, you can no longer file your taxes as single or as head of household. A taxpayer’s marital status on December 31 determines whether they’re considered married for that full year. Generally, the tax law allows married couples to file their federal income tax return either jointly or separately in any given year. Check with Fuoco Group tax professionals to determine what status is best for you.
- Though you must choose between “married filing jointly” or “married filing separately,” Tax Reform has smoothed out the unequal tax brackets for married and single filers earning the same income for all but the folks in the highest income tax bracket, so it may be advantageous to file jointly, depending on your unique situation. The TCJA’s $10,000 SALT cap works against married taxpayers though. A married household filing a joint return only gets to claim $10,000. Also, if you have federal student loans and have filed for an income-driven repayment plan, check with Fuoco Group first before you file.
- After you give your spouse the gift of yourself, you can give each other as much money as you wish without worrying about triggering the gift tax. Likewise, spousal survivorship allows for you to pass your estate on to your soulmate without worrying about the estate tax.
- Other tax benefits include a higher personal residence gain exclusion upon marriage. The amount of home-sale profit that can be tax-free, doubles.
- All taxpayers should check their withholding at the beginning of each year, or when their personal circumstances change — but especially after getting married. Using the IRS Withholding Calculator is a good way to check withholding. Taxpayers who need to change their withholding should complete and submit a new Form W-4, Employee’s Withholding Allowance Certificate, to their employer.
- Marriage may mean a change in name. If either – or both – of the newlyweds legally change their name, it’s important to report that change to the Social Security Administration. The names on a taxpayers’ tax return must match the names on file at the SSA. If it doesn’t, it could delay any refund.
- Taxpayers who receive advance payments of the premium tax credit should report changes in circumstances to their Health Insurance Marketplace as they happen. Certain changes to household, income or family size may affect the amount of the premium tax credit. This can affect a tax refund or the amount of tax owed.
- If a marriage means a change in address, the IRS needs to know. Newlyweds can file Form 8822, Change of Address, to update their mailing address with the IRS.
CONTACT US: There are tax credits, deductions, and other tax breaks couples enjoy when they’re married filing jointly. How your taxes change after you get married can have a big impact on your financial future together, especially if children are involved. Your Fuoco Group professional can guide you about the tax benefits of marriage and how your obligations to Uncle Sam might change “…for better or for worse!” Call toll free: 855-534-2727.
