We are now officially into fall, even if many of us already left summer mode behind once Labor Day passed. For most, this means a little more buckling down at work before the holiday season comes and gives us a new excuse to take some extra time off work. It also means we are exiting the high time of the year for weddings.
And sure, these are beautiful occasions when people declare their love for one another in front of the people who mean something in their lives … but it also comes with some financial and tax considerations, and that’s where I come in. Maybe that’s why I am not invited to too many weddings, but this semi-killjoy attitude still comes with information that the recently married should know. Even those who are not yet married may want to pay attention, for when it comes to tax purposes, even if you do not get married until December 31, you are considered married for the year when it comes to tax purposes.
First, marriage often comes with a change in name, and it is important to report this change to the Social Security Administration. The name on your tax return must match what is on record with the SSA. And sure, dealing with a Social Security comes with a level of joy that may only be rivaled by a trip to the DMV, but it is worth it to not run into issues come tax time. Along the same lines, if you have changed your address, send the IRS a change of address form, too.
Next, married couples will face a decision on whether they want to file their tax returns jointly or separately. Filing jointly is usually the better way to go, but everyone’s situation is different, so it is worth looking into to make sure you are selecting the most beneficial status.
Once you figure out how you will file, it is a good idea to run some rough calculations and get an estimate for how much tax you will owe by the end of the year. Once you know that number, it could be worth considering changing your withholding. If your new combined income means will owe a little more, you can start having that withheld from your paycheck and not face a big bill early next year. If your new situation means you can expect a bigger refund, though, changing your withholding can allow you to bring home more money each week in your paycheck, and that is usually a welcome thing with that aforementioned holiday season coming up.
Finally, when you look up issues concerning marriage, the IRS includes their near-constant reminder to watch out for scams. There are legitimate things to think about when it comes to your finances when newly married, and there are legitimate people who can help you with that. If someone contacts you claiming that your new status comes with some new payments you have to make, though, that is less legitimate. Remember to follow your gut instinct if something sounds fishy, and do not hesitate to investigate it.
After all, it’s that gut instinct that led you to the marrying your partner in the first place, no? Those guts can know some things.
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To ensure we don't make the folks at the IRS ornery, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.