Getting married is one of the most exciting milestones of your life. Not only do you get to officiate your life together with the one you love, but you begin sharing each other’s benefits. In order to make the most of this newfound opportunity, it’s important to plan ahead. Follow these easy steps to make sure that you and your spouse are prepared for filing taxes together come tax season!
1. Update Names & Addresses
If you’re choosing to change your name, it’s important that the first thing you do is get that new last name updated with the Social Security Administration. You will need your certified marriage license with the seal raised seal in order to do so. Once you’ve updated your name, you’ll receive a new Social Security card, which will make updating everything else a whole lot easier.
Now that you have your new Social Security card, you’ll want to head over to the DMV to update your driver’s license. Once your driver’s license is updated, you can pretty much update everything else. You’ll want to update your bank accounts, credit cards, and utility bills first to sustain your standard of living. This is especially important if you and your spouse plan on setting up a joint bank account together.
Additionally, if the two of you are planning on moving, you’ll want to notify the IRS. You should also update your address on your driver’s license, bank account, and utility bills as well. This will help assure that your bills and bank statements don’t get lost in the mail.
Other places you may want to notify:
- Passport office
- Voter registration’s office
- Insurance companies
- Post office
2. Update W-4s
If you and your spouse are both employed, it’s important for both of you to update your W-4 forms. Your new combined income may place you in a higher tax bracket so you'll want to check your withholding. While the IRS provides online resources to help you figure out how much withholding you will need, it's smarter to check with an accountant or a CPA to alleviate any calculation errors.
Every time that you get married or have children, your allowances change, so you want to be sure that you're filling out your W-4 ideally in order to get the most out of your tax returns. The goal is to claim the correct amount of allowances so that you do not owe taxes, nor do you need a refund. Be sure to update your W-4 and allowances and give the newly updated form to your employer!
3. Determine Joint or Separate Filings
While most newly married couple choose to file their taxes jointly, it's not always ideal for everyone. Both filing separately and jointly have their advantages. Either way, it's important to calculate the benefits of both options, to see which is best for you.
One of the perks of being married is having the ability to file your taxes jointly. This can be a huge advantage, especially if one of you out-earns the other. If one spouse earns more than the other, combining incomes may actually place the higher earner in a lower tax bracket. When you file jointly, you qualify for new tax breaks, credits, and deductions such as the earned income tax credit and IRA deductions. Additionally, your taxable income may also be reduced if you file jointly.
In some rare occasions, it may actually benefit couples to file separately, especially if you and your spouse earn similar incomes. If one of you claims an itemized deduction that is greater than their standard deduction, filing separately may be the best option. For example, if you or your spouse have a lot of out-of-pocket medical expenses to claim, filing separately could actually save you both money. This is due to the fact that filing separately allows you to deduct more when your incomes aren't combined.
4. Complete the Right Tax Form (Form 1040)
One of the last things you need to do as a married couple is fill out the correct tax forms. Whereas before, you may have been filling out a 1040EZ or 1040A, many newly married couples now need a Form 1040. If the two of you have filed jointly, you may not have enough deductions to itemize on your tax returns, meaning you will now need to fill out a Form 1040.
Getting married should be exciting, not stressful. In order to be sure that you and your new spouse are prepared to file your taxes together, it's best to turn to the experts. The trusted team at Great Lakes Accounting can help you and your spouse prepare to file for your taxes together and get the most of your happily ever after.