Couples who are getting married soon should check the new tax duties. A change in marital status can affect your taxes, including your tax filing status. Couples who are divorcing may also want to update your tax information such as postal address and name too. Changes in name and postal address can be reported to the IRS using IRS Form SS-5 and 8822 respectively. Soon to be married couples will also need to report any name or address changes to their employer(s) for tax withholding purposes.
The Huffington Post discusses some of the important adjustments couples will need to make after getting married:
“Double-Check Your W-4 Withholding Allowances: Remember that form you filled out when you first got your job? Well, now that you’ve ‘put a ring on it,’ you may need to adjust your withholding.
For couples where only one spouse is working, this may be as simple as changing from ‘single’ to ‘married’ and increasing exemptions from one to two. However, if both you and your spouse work, you should not both change to M-2 without first filling out the Two-Earners/Multiple Jobs Worksheet section of form W-4. Your combined incomes may put you into a higher marginal tax bracket than you each had as a single person. You should plan to file a new W-4 form with your employer. If you are unsure of your allowances, visit a tax professional for assistance.
Retirement Plans are Favorable for Married Couples: Certain retirement plans, such as an IRA, offer favorable rules for married couples filing a joint return. In order to contribute to an IRA, you must have earned income (from wages or self-employment).
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 tax return is filed. Additionally, spouses can inherit IRAs from one another and choose to treat the IRA as their own, which provides more payout options.”
After marriage, you and your spouse may choose to file tax returns separately or jointly in any year. Usually, married taxpayers determine their tax filing status after figuring out which filing status gives them more benefits. Although, it depends on various particulars, in most cases filing jointly provides the most benefits. The Huffington Post explains further:
“In most cases, married filing jointly will be your best choice. Tax rates are higher for married filing separate, so your overall tax bill will likely be less if you file jointly. You may also qualify for adjustments and credits unavailable to couples filing separately. However, under certain circumstances, couples may benefit from filing separately.”
To find out what credits you and your spouse can use, and how you can benefit from your new status as a married couple, it is best to consult a tax specialist.