The tax implications of marriage probably aren’t the first thing on your minds as newlyweds. But, there are important items you’ll need to change or update once you’re married.
Addressing these things now can save you time and money later.
Here are seven tips that can help you and your spouse prepare for your first tax season together.
1. Notify the Social Security Administration with any name change(s).
The IRS has a name match program with the SSA. It might reject deductions and joint filing if the name change is not made in a timely manner.
Do this by filing Form SS-5 with the SSA.
2. Use Form 8822 to update your address with the IRS if either of you is moving.
3. Change your name and addresses with your employer and the Postal Service.
This will help ensure your W-2s are correctly stated and delivered to the right address.
4. If selling a residence, review how capital gains tax laws apply to your situation.
This is especially important if one of you has been in your home for only a short time or if either home has appreciated in value.
5. Review legal documents to ensure legal titles are correct.
This includes bank accounts, titles on property, credit cards, insurance policies, and living wills.
6. Recalculate your payroll withholdings and file a new W-4.
If both of you work, your combined income could put you into a higher tax bracket.
This phenomenon is called the “marriage penalty.” By changing withholdings now, you can avoid a big surprise at tax time.
7. Review your employee benefits.
Make any necessary changes in health care, insurance, retirement account beneficiaries, and tax-preferred spending accounts.
Most employers consider marriage a qualified event and will allow you to make mid-year changes.
Have questions about taxes? Let’s talk!