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Tax Tips for Newlyweds

Posted by Matt Evans Posted on July 29 2016

In a recent article about marriage that was published in Accounting Today, Daniel Hood gives some good advice for tax planning.           

Looking for a gift to give after all those June weddings? How about some solid tax advice for the newlyweds?  Taxes may not be top-of-mind for most new couples, but there are some important tax issues they should be aware of, so the IRS put together the following set of tips.

  • New names? Whether one of the spouses takes the other’s name or not, the names and Social Security numbers on their tax return must match their Social Security Administration records – so if any names are changed, they’ll need to report it to the SSA with Form SS-5, Application for a Social Security Card. The form is available on www.ssa.gov, or by calling (800) 772-1213.

  • Congratulations – you’re in a new bracket! The spouses’ new marital status needs to be reported to their employers on a new Form W-4, Employee's Withholding Allowance Certificate. And the IRS was quick to point out that the new couple’s combined income may move them into a higher tax bracket.

  • Yes, there’s an Obamacare angle. If either spouse bought a Health Insurance Marketplace plan got an Advanced Premium Tax Credit this year, they need to report any changes in circumstance, like income or family size. They should also alert their Marketplace is they moved out of its area.

  • Crossing the threshold. If either of the newlyweds is moving, they’ll want to let the IRS know, with Form 8822, Change of Address. (They should probably also let the Post Office know, too.) Don’t make them come looking.

  • Married? Filing jointly? If the couple is married as of December 31, that’s their marital status for the whole year for tax purposes – and that means they need to decide whether to file jointly or separately. Which one is better depends on the couple’s individual circumstances, so they’ll want to check out both possibilities.

  • New forms. Combined financial lives may mean a higher tax bracket, but they can also mean more benefits from itemizing – which would mean claiming those deductions on a Form 1040, as opposed to a 1040A or 1040EZ. 

This blog is published to provide you with an informative summary of current business, financial, and tax planning opportunities.  Do not apply this general information to your specific situation without additional details.  Be aware that the tax laws contain varying effective dates and numerous limitations and exceptions that can not be summarized easily.  For details and guidance in applying the tax rules to your specific circumstances, please contact us.