Marriage is a big moment for everyone. It’s taking the next step with the person you love and building a new life together. It can also be a time to make some pretty lofty decisions.
Prepare for the decisions that come along with marriage life. Figure out how you’ll file your taxes. Making changes to your taxes can be overwhelming. Be prepared with the help of Cruise & Associates. Here are a few things to keep in mind when it comes to taxes for newly weds.
Double-check your social security information
The name and address you put on your tax return should always match your social security information. Failure to update these forms could cause a delay in processing your tax return, affecting a possible refund. Simply visit ssa.gov to take the next steps.
Report any changes to employers
If you changed your name or address after the wedding, you’ll need to inform your employer. Having a current address and name is essential for them to properly fill out your Form W-2 and Wage and Tax Statement.
Decide filing status
After the wedding, you’ll need to decide how to file your taxes. Married couples have two options: joint or separate. A joint return means that both you and your spouse are responsible for the taxes, interest, and penalties due on the return. If you don’t want to be responsible for the financial liabilities of your spouse, then opt for the filing separate. Only around 5% of married couples choose to file separately, however it can make sense if you’re still paying off student loans and concerned about tax liability issues.
Adjust your withholding
After you get married, you’ll need to work with your employer on adjusting your withholding. Your first step is for you and your spouse to figure out how many allowances you deserve. Miscalculating your withholding can result in either too much income tax withheld, or too little. Use the IRS withholding calculator if you need some additional help.
Understand the marriage penalty.
The marriage penalty is a popular rumor that always pops up before and after couples tie the knot. This penalty refers to married couples having to pay more income tax than they would have if they were filed separately. In all reality, that might not be the case. Some married couples get pushed into a different tax bracket and become eligible for a marriage bonus and pay less income. Ultimately, the amount or bonus comes down to how equal the two incomes are.
Starting a new life with your spouse is exciting. Don’t let tax confusion ruin the honeymoon stage. If you’re having trouble figuring out your tax situation as a newly married couple, give Cruise & Associates a call. We can answer all your tax questions.