Newlywed Tax Advice

Congratulations! This exciting time in your life can bring lots of changes, such as moving into a new apartment, buying a house, combining finances or joining families. It’s so fun to start out your new life together, but it’s a big adjustment too.  One of those really difficult adjustments is learning a new phrase, “Our money.”  You already know “your” money and “my” money, but the whole “our” money concept is a little difficult to grasp sometimes.  Hopefully, this will help with the tax side of that at least. As we approach the tax season, there are some other changes that you and your new spouse need to keep in mind to make sure the IRS doesn’t ruin your marital bliss.

Update Last Name with SSA

It’s important that your name and Social Security number match on your next tax return, so if you’ve taken a new name, be sure to report the change by filling out File Form SS-5, Application for a Social Security Card, which is available on the Social Security Administration’s website or by calling 1-800-772-1213.

Notify Your Employer

Update your employer if you change your name or address to ensure you receive your W-2, Wage and Tax Statement, after the end of the year.

Check Your Withholding

If both you and your spouse work, remember that your combined income could place you in a higher tax bracket. You can use Publication 505, Tax Withholding and Estimated Tax, to help determine the correct amount of withholding for your marital status. You should also complete a new Form W-4, Employee’s Withholding Allowance Certificate, with your employer. Use the IRS Withholding Calculator.

Update Address with Postal Service

Submit a forwarding address to USPS to ensure your mail is sent to your new address. This can be done online or at your local post office.

Update Address with IRS

Filling out the IRS form 8822, Change of Address, is the official way to update your address change. The form can be downloaded from the IRS’s site or by calling 1-800-TAX-FORM.

Update Name and Address with Department of Motor Vehicles (DMV)

You can change your residence or mailing address for your California Driver License, Identification Card, vehicle, or vessel online or by filing out DMV14 Change of Address form. To change your name, follow the instructions from the DMV website.

Select a Filing Status

A person’s marital status on Dec. 31 determines whether they are considered married for that year for tax purposes. Tax law generally allows married couples to choose to file their federal income tax return jointly or separately during any given year. Figuring the tax both ways can determine which filing status will result in the lowest tax, but filing jointly tends to be more beneficial. There are times though, when it may make sense to use the married filing separately status.  For example:  if one of you has an income tax problem from before the marriage, it might make sense to file separately until the tax issue is cleared up.

Now that you’re married, you cannot claim the Head of Household or Single filing status.  This is a common problem that I see with tax returns all the time.  Couples who have been together for years and have a couple of kids decide to get married.  They forget to change their filing status on their tax forms after they get married.  Oops.  Not only is it a mistake, but if you received benefits that you wouldn’t have gotten if you filed as married, then it’s considered income tax fraud.  Don’t fall into that trap.  Be sure to use one of the married filing statuses.

Dependents

A spouse can never be claimed as a dependent, even if he or she had no income. This are personal exemptions. One for you and one for you spouse; not dependent exemptions.

Consider Tax Deductions

Newlyweds often make many changes in their lives that have tax implications. Newlyweds buying a new home will likely be eligible for a number of new deductions. Having children also significantly impacts a couple’s tax situation.

Injured Spouse Relief

If you file a joint return and all or part of your refund is applied against your spouses’ past-due debt you may be entitled to injured spouse relief.  Past due debts include: