Just Married? How to File Taxes As A Newlywed

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The average age for women to get married in 2017 was 27.4 years old. The average age for men was 29.5 years.

Today’s young adults are enjoying their single years longer than ever. They become adjusted to managing solo bank accounts and filing their own taxes. Life as a couple involves rearranging your finances to accommodate another person.

Will your taxes change after you get married? The answer varies greatly for most newlyweds. Taxes after marriage depend upon factors such as your income, your spouse’s income, debt, charitable giving, and tax liability.

Here are some things every couple should know.

1. Pay A Visit To Your Social Security Office

Your marital status gets determined on December 31 of the year you are filing for. So, if you got married on December 30, 2019, you will get considered married for that year when you do your taxes in April.

The IRS may delay processing your tax return if your name changed and they were not notified. They may also deliver it to the wrong address.

You will only need to pay a visit to your local Social Security office if you are the one changing your name. A new social security card can serve as proof for changing your name on your license. This can, in turn, get used as proof for changing everything else, including utility bills, banks, and credit cards.

In order to change your name on your social security card, you can visit your local social security office or find the form online and bring it in.

You will need evidence of your age, such as a birth certificate or adoption certificate. You should also bring photo identification such as a driver’s license or passport. You will need your marriage certificate.

Your new card will get mailed to you, sometimes within a few days. Getting it before applying for any other documentation can save you a lot of time.

2. Update Your W-4 With Your Employer

Your W-4 is the form your employer uses to determine how much tax they will withhold from your paycheck. When you are single, you can only use one for yourself. After you get married, you can take one for both yourself and your spouse.

Adjusting allowances could allow you to avoid overpaying taxes throughout the year. If you have too much tax withheld, you may not get your money when you need it. If you withhold too little, you could get an unpleasant surprise at tax time.

Claiming an additional allowance or changing your withholding to the “married” rate on your W-4 means that fewer taxes will be withheld from your pay.

Your W-4 is not likely to stay the same after you get married. Talk to your tax accountant or tax attorney if you need help filling it out.

3. Tell The IRS About Your Change of Address

The IRS will now send your tax returns to your new address. If you neglect to change it with them, your tax refund check could be sent to the wrong home.

Fill out form 8822 with the IRS. If you change your address before filing your return, enter your new address on your return when you file. If you change your address after you file, notify the post office that services your old address.

You can also write to the IRS to provide you with your new address. You will need to supply your full name, new and old addresses, social security number, and signature.

4. Choose Between Filing Jointly and Filing Separately

Once you get married, you may choose two options when you fill out your return. You may select from “married filing jointly” and “married filing separately.” 

If you were single and are now filing jointly, most calculations will get doubled. In almost no situation will you save money on your taxes by filing separately. There are, however, a few cases in which this may benefit you.

In most cases, filing jointly will save you the most, since the IRS views each spouse as earning half of the total income. This will keep more of your income in lower tax brackets.

Filing jointly will also raise the limit of the charitable deductions that can get deducted throughout the year. Your spouse’s income will count in determining your deductible amount. You will also only have to deal with the hassle and expense of filing one return.

Filing separately as a married couple could prohibit you from claiming deductions for student loans, tuition, fees, education credits, and earned income credits. You could reduce your tax refund or raise your tax bill by thousands of dollars.

5. When To File Separately

It may be to your benefit to file separately if either your spouse or yourself have enough tax deductions to itemize the return. These deductions may include medical or business expenses.

When you itemize, your spouse gets required to itemize as well on a joint return. This may mean you could miss out on the Tax Cut and Job Act’s standard deduction. If your tax deductions are big enough, it may be worth it to file separately.

You may also wish to consider filing separately if you live in a community property state. In these states, all assets acquired during marriage get considered “community property.”

Marital property in community property states are owned by both spouses equally (50/50.) This includes all earnings, all property bought with these earnings, and all debts accrued during the marriage.

If you live in a state like Arizona, California, Idaho, Nevada, New Mexico, or Wisconsin, there is a complicated set of rules that determine what is community and what is marital income. 

The rules for community property vary among the states. Your combined income might be split between your returns if you file separately, thus negating your intent.

Before determining how you should file, speak to a tax accountant about the rules in your area. You can also use tax software to try filing separately and together, and see which method saves you more money. This may take an extra hour or two of your time, but it will be well worth the effort.

6. Prior Debt

One reason married couples may choose to file separately is that one of them has prior debt that is past due and can get deducted from their taxes. This includes overdue child support, past-due loans, or tax liability.

Yet filing separately over past liens may not be necessary. The spouse without debt can file an Injured Spouse Allocation Form each year with their married-filing-jointly tax return.

This will keep the spouse who doesn’t have debt from getting penalized on their tax return and losing their share of the tax refund. 

The couple can still declare deductions and credits that they could not get by filing separately.

7. The Risks of Filing Jointly

When you file jointly with your spouse, you will be considered equally at fault for any errors or intentional omissions. You will also be responsible for any additional tax, penalties, and interests that arise from that mistake.

If the IRS catches a discrepancy, you will likely both get held liable. You will get required to help pay back any outstanding balance, plus interests and penalties.

The IRS can look for you to pay back the balance even years after you have divorced your spouse. It may be possible for the IRS to drop your liability for fraud committed by your spouse. You will need to file for Innocent Spouse Relief and prove you didn’t know about it.

As a married couple, it may also be more difficult to meet the minimum percentages of income necessary to deduct medical expenses, unless one or both of you has significant expenses. 

In addition, a fund could get delayed or blocked if your spouse has an unpaid loan or child support. 

8. The Benefits Of Married Filing

When one spouse makes more than the other, the spouse with the higher income may get moved to a lower tax bracket since each partner is considered to make half of their total income.

Married couples filing a joint return get to claim two personal exemptions on the tax return instead of the one exemption allowed when you file as an individual. 

The standard deduction allowed on a tax return is the highest for married couples filing a joint return. The standard deduction as of 2019 is $12,200 for individuals and $24,000 for married couples filing jointly and surviving spouses. 

If one spouse doesn’t work, they will now be eligible for an IRA (Individual Retirement Account.) They may not even have thought about saving for retirement previously. In addition, the point at which the IRA benefits begin to phase out is much higher for married couples than it is for single people.

Couples who marry have the advantage of choosing the best benefits from each of their employers. This can help you increase your savings on tax day.

If, for example, the couple has dependent children, they can benefit from using plans such as dependent care plans. One spouse may have this as part of their benefits package, while the other one does not.

If you or your spouse make large charitable contributions but doesn’t have an income of at least double that amount, the excess contributions get carried over into the next year.

If you file the return jointly, it will add to the generous spouse’s income in determining the deductible amount. This will allow them to save more right away.

9. Estate Protection

Marriage can also help protect the estate of a wealthy person after they die. Under federal law, individuals are permitted to leave any amount of money to a spouse without generating an estate tax. The exemption protects the deceased’s estate until the spouse dies.

10. Buying Or Selling A Home

When you get married, you and your spouse may choose to purchase a house a home with your combined incomes. When you sell a home, the interest you pay on a mortgage payment is deductible on your tax return as an itemized deduction.

If you are selling your home as a married couple, the amount of gain that can get excluded from your income doubles. If, however, only one of you owned the home before you got married, the higher exclusion only applies if both of you lived in the home as your primary residence for at least two years before you sold it.

11. Dependent Children

You and your new spouse may be dreaming of starting a family together, or your spouse may have a child from a previous marriage or relationship. You are eligible for a tax credit of $2,000 per qualifying child

Any child who is your biological child, stepchild, foster child, sibling, stepsibling, or descendant of these individuals can be dependent. The child cannot turn nineteen at any time during the tax year. This age increases to twenty-four if the child is a full-time student.

When you are figuring out the amount of financial support to claim on your taxes, you can include a portion of your housing expenses as well. If you have a spouse and another child, for example, 25% of your housing expenses are for the support of the child. 

Your child needs to be a U.S. citizen and resident in order to qualify.

Tax Help For Newlyweds

Your taxes after marriage are not likely to stay the same. You will need to change your documents and decide if you should file jointly or separately. Many couples enjoy an improved tax status after they marry.

For more information on taxes for newlyweds, contact us today.

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