Newlywed Tax Tips | Recently Married – Raleigh NC
Newlywed & Tax Tips
Adjusting to married life brings upon many changes in both the personal and financial areas of your life. While the IRS may not be on your wedding guest list, they should be factored into your newlywed checklist when it comes to filing your first tax return as a married couple. Like with any tax issue, you should always contact a tax professional that can help you understand and navigate your particular situation. Here are some Newlywed Tax Tips you should know about:
Updating Your Marital Status with the Social Security Administration
If either you or your spouse has taken on the other one’s name, you should immediately report it to the SSA. You can file form SS-5, which is the “Application for a Social Security Card.”
Both your name and your Social Security number must match on any tax forms you file after you get married. The IRS will cross reference the information with the records that are provided by the SSA. If those records do not match, it can affect your electronic filing and your tax return will be rejected because of the inconsistent information. Any personal exemptions can also be dismissed until you correct the error.
Try not to change your name too close to tax season because there may be a delay in data sharing between the IRS and the SSA, so to avoid any problems you should file your tax return using your maiden name and then change your name with the SSA post tax season. Remember that you can download form SS-5 from the SSAs website, or call 800-772-1213 to start the process. You will need a copy of your driver’s license (or passport) and marriage certificate to file the name change.
Choosing the Right Filing Status
Your actual marital status as of December 31st will determine if you are going to be considered single or married for the entire year according to IRS policies. Typically, the law will allow married couples to file their federal income tax return separately or jointly during any year. Doing so can determine which filing status will result in lower tax obligation. Most married couples will find that filing together (jointly) results in a lower tax liability, especially if there is a marginal difference in both of your salaries. The infamous “marriage penalty” will only apply to married couples that both earn high salaries. You should file separately if:
- You and your spouse each has itemized deductions like medical expenses which will allow you to claim higher overall deductions due to the percentage limitations listed on Schedule A.
- Either spouse has an existing debt with the IRS or any other government agency like a child support obligation or student loans. Filing separately will avoid the other spouse having to use their refund to pay off the other one’s debt.
Notifying Financial Institutions
Any financial institution that you use to do business must be informed of any change in your marital status in order to ensure that your forms are sent to the proper address and in the proper name. That means that all banks and brokerage firms, in addition to any institution that manages your retirement plan(s).
There are many changes that come with getting married, and preparing your tax return can become tricky when you’re a newlywed. If you recently got married in North Carolina, and you need professional advice on filing your tax returns, please contact us with any inquiries you may have. You can also book an appointment to meet or speak with one of our tax professionals in North Carolina.
