Tax Insights

Your Guide to State, Local, Federal, Estate + International Taxation

Tax planning as newlyweds

You and your fiance planned your wedding and it was a beautiful and memorable event, so congratulations to you both! You can now sit back and enjoy married life while reminiscing about all the fun (and not so fun) times planning your wedding. But, wait, is there something that you may have forgotten to plan for? Suddenly it’s tax time and you just realized that your tax situation is now different from when you were both filing as single persons . . . yikes! Why didn’t anyone tell you to do the following things as part of your wedding planning:

Filing status

Consider how you and your spouse want to file your first tax return after marriage. Your filing status is determined on December 31 of each year. So, you would be considered married in the year of marriage. Most married couples file jointly (MFJ) and some couples choose to file as married filing separately (MFS). Use the IRS’s interactive tax assistant to determine your filing status. Keep in mind that your filing status is used to determine your filing requirements, standard deduction, certain credit eligibility and your tax liability. This interview will also assist you in determining which is the best choice for you (read that as lowest tax assessed) if you qualify for more than one filing status. Keep in mind that this tool is designed for U. S. citizens or resident aliens for the entire tax year of inquiry for both you and your spouse.

Learn more about the marriage penalty 

Withholding

Consider changing your federal withholding amounts from your paychecks. You can use the IRS Withholding Calculator to determine if your withholding needs to be changed. If it does need to be changed, submit a new Form W-4, Employee’s Withholding Allowance Certificate, to your employer. Remember to do this with your state withholding, also. Check with your state’s tax department website for their calculator and Form W-4 equivalent.

Name and address change

Did you or your spouse change your name after marriage? If so, then make sure that you report the name change to the Social Security Administration (SSA). If the names on the tax returns don’t match the names on file at the SSA, it could delay a potential refund you’re awaiting. Did you change your address after marriage? If so, report the address change on Form 8822, Change of Address, to update your contact info with the IRS. Also, don’t forget to change your address with the post office!

Health insurance

If you or your spouse received advance payments of the premium tax credit on your health insurance with the Health Insurance Marketplace, make sure you report your change in circumstance. Remember, the premium tax credit may be affected by changes to household, income or family size which may result in a change of tax owed or tax refund.  If you moved to a different state, make sure that you notify the Marketplace.

And the last question: where should I go for more questions or assistance with my taxes? That answer is easy. Contact your Henry+Horne tax advisor.

 

Sahar T. Clancy, CPA

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