The summer months are upon us and that brings warm weather and weddings. It is important, as you are about to walk down the aisle, to make sure to think about the impact marriage will have on you come April 15th. Making changes immediately can definitely make tax time a lot less stressful. Consider these tips to make sure that everything is in line for you and your spouse as you settle into your new life.
- The biggest change is your marital status. Transitioning from a single or head of household status can impact the exemptions and deductions that you previously had. For instance if you were previously head of household you will lose the extra exemption that you get. You instead are shifted to Married Filing Jointly which combines your incomes and possibly could bump you into the next tax bracket, thus meaning more tax withheld. Knowing what changes can occur once your vows are exchanged can mean the difference of paying more at the end of the year or balancing out before December 31st.
- Make sure you change your address and that your name has been properly changed with the social security administration. The IRS identifies you with your name and social security number. If they do not match you will have a tough time filing your return without it being rejected.
- If you and your spouse work it is important to review your withholdings from your paychecks. As I said before your combined incomes may bump you into the next tax bracket meaning that your previous withholdings may not be large enough and create a larger amount owed on April 15th.
- Itemized deductions may not have been on the table when you and your spouse were filing separately but now it could be an option. Being able to itemize rather than using the standard deduction may mean a large tax savings. Knowing if itemizing is now an option will allow you to plan for tax time better by keeping track of those new allowable deductions.
- The IRS says that if you are married on December 31 that your marital status is now married. Forget the last 364 days you can no longer file as single or head of household. Make sure that you review whether filing Married filing jointly or separately is the way to proceed. Often Filing Jointly is the best way but in some cases filing separately will be more of a benefit.
There are many things to consider when you get married in regards to taxation but taking some time right away to make the right adjustments and knowing what direction you should go can make an impact on your first tax year of being married.
