Congratulations if you recently updated your status from single to married, but you should be aware that marriage also brings about some changes with your income taxes. Here are several tips for newlyweds from the IRS:
Notify the Social Security Administration. It's important that your name and Social Security Number match on your next tax return, so if you've taken a new name, report the change to the Social Security Administration. Your Social Security Number is the key to your tax filings. If you do not reconcile your name and tax ID number, your return could be rejected because of the mismatch. File form SS-5, Application for a Social Security Card. The form is available on SSA's website at www.ssa.gov, by calling 800-772-1213, or visiting a local SSA office.
Notify the IRS if you moved. IRS Form 8822, Change of Address, is the official way to update the IRS of your address change. Download Form 8822 from IRS.gov or order it by calling 800-772-1213.
Notify the U.S. Postal Service. To ensure your mail, including mail from the IRS, is forwarded to your address, you'll need to notify the U.S. Postal Service.
Notify your employer. Report your name and/or address change to your employer to make sure you receive your W-2, Wage and Tax Statement, after the end of the year.
Check your Withholding. If you both work, keep in mind that yours and your spouse's combined income may move you into a higher tax bracket. You may need to complete a new Form W-4, Employee's Withholding Allowance Certificate, to determine the correct amount of withholding for your marital status.
Select the right tax form. Choose your individual tax form wisely. Newlywed taxpayers may find that they now have deductions to itemize on their tax returns rather than taking the standard deduction.
Choose the best filing status. A person's marital status on Dec. 31 determines whether the person is considered married for that year for tax purposes. Tax law generally allows married couples to choose to file their Federal income tax either jointly or separately in any given year. Figuring the tax both ways can determine which filing status will result in the lowest tax, but filing jointly is usually more beneficial. Keep in mind, though, if one spouse itemizes on his or her return, the other spouse also must itemize when filing married filing separately.
Retirement plans are more favorable. In order to contribute to an IRA, you must have earned income. But if only one spouse has earned income, the law allows the spouse with no income to make an IRA contribution based on the earned income of the working spouse, provided a joint return is filed. Additionally, spouses can inherit IRA's from one another and choose to treat the IRA as their own, which provides more payout options.
So congrats, newlyweds! Just be sure to plan ahead so you won't have any surprises at tax time.
Barry Lisak is an IRS Enrolled Agent, meaning that he has passed special U.S. Treasury Department exams that qualify him to represent clients dealing with audits or tax-resolution cases. Any questions can be directed to him at (516) TAX-SAVE, or firstname.lastname@example.org.
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