You thought the planning was over once you walked down the aisle to say “I do.” But now your new life together has begun and that means you are in a whole new category of financial and tax planning.
Figuring out how to combine your furniture into one home is probably less complicated, but here’s a guide to make it easier. This six-step checklist will guide you through the essential tax-related tasks for newlyweds.
Report a Name Change
If either spouse has changed their name, it’s crucial to update all necessary records to avoid any issues with tax filings.
Steps to Report a Name Change:
- Social Security Administration (SSA):
- Complete Form SS-5 (Application for a Social Security Card).
- Submit the form along with your marriage certificate, proof of identity, and proof of U.S. citizenship or lawful immigration status to the SSA office.
- Once processed, your new Social Security card will be issued.
- IRS:
- Ensure that your name with the SSA matches the name on your tax return. The IRS verifies names through the SSA records.
- If you’ve changed your name after filing your tax return, notify the IRS by sending a signed letter explaining the name change and attaching a copy of the SSA acknowledgment.
Update Your Address
If you’ve moved to a new address, update your records to ensure you receive important tax documents and correspondence.
Steps to Update Your Address:
- United States Postal Service (USPS):
- Submit a change of address form online at the USPS website or visit your local post office.
- Internal Revenue Service (IRS):
- Complete and submit Form 8822 (Change of Address) to the IRS.
- Alternatively, you can update your address when you file your tax return. Just provide your new address on the tax form.
- Employer:
- Notify your employer of your new address to ensure your W-2 and other payroll-related documents are sent to the correct location.
- Financial Institutions:
- Update your address with banks, credit card companies, and other financial institutions to ensure you receive all financial statements and documents.
Adjust Withholding on Form W-4
Marriage can affect your tax liability, so you might need to adjust your tax withholding.
Steps to Adjust Withholding:
- Complete a New Form W-4:
- Use the IRS Withholding Calculator to determine the appropriate amount of federal income tax to withhold from your paycheck.
- Submit a new Form W-4 to your employer with your updated withholding information.
Understand Your Filing Status
Your filing status can change after marriage, which impacts your tax rate and eligibility for certain tax credits and deductions.
Filing Status Options:
- Married Filing Jointly:
- You and your spouse report your combined income and deductions on one tax return. This status often provides the most favorable tax rates and benefits.
- Married Filing Separately:
- You and your spouse each file separate tax returns. This may be beneficial if you want to keep your finances separate or if it results in a lower tax liability.
Review Your Tax Benefits
Marriage may make you eligible for new tax benefits and credits.
Common Tax Benefits for Married Couples:
- Earned Income Tax Credit (EITC): Your combined income may make you eligible for a larger credit.
- Child and Dependent Care Credit: If you have dependents, you may qualify for this credit to help cover childcare expenses.
- Education Credits: If either spouse is pursuing higher education, you may qualify for education-related tax credits.
Consult a Tax Professional
Tax laws can be complex, and marriage can significantly impact your tax situation. Consulting with a tax professional can help ensure you make the most of your tax benefits and avoid potential pitfalls.
By following this checklist, you’ll be well-prepared to handle the tax-related aspects of your new marital status.