Important Tax-Saving Strategies for Newlyweds

If you are getting married in the near future, you have a lot of planning to do. Choosing your venue, your wedding song, the flowers and the attire are all very important. But after the wedding is over, you and your spouse have other things you need to plan for, and one of them is your tax status as a married couple.

Taxes may not be on the forefront of your mind when you are getting married, but there are some important tax consequences that you and your new spouse should be aware of. To make things easier for you at tax time, here are some potential issues you should be aware of:

Is Your Name Changing?

If you are planning on taking your spouse’s name, make sure that the names and Social Security numbers on your tax return match the records on file at the Social Security Administration (SSA). If you did decide to change your name, you will need to report the change to the SSA by filing Form SS-5, the same form you would use to apply for a new Social Security card.

You May Be in a New Tax Bracket

Your combined income as a married couple could put you in a new tax bracket, very often in a higher income bracket than where you are now. If this is the case, you may be claiming too many exemptions on the W4 you have on file with your employer, which means you could end up owing money to the IRS next April. Take a look at your combined income and your current exemptions, and if necessary, speak to your employer about amending your W-4.

Make Address Changes Known to the IRS

Whether you are moving into your spouse’s home, or you are moving into a home that is new to both of you, you will want to let the IRS know. To do this, you file Form 8822, Change of Address. If you have your mail forwarded to your new address for a certain period of time, this may be sufficient until tax filing season, at which time you can update your address. Just keep in mind that the IRS always initiates contact with taxpayers by mail, so one way or another, be sure they either have your latest address on file, or that their mail can easily reach you.

Enroll in the Health Insurance Marketplace

Under the Affordable Care Act, all taxpayers are required to carry health insurance for the majority of the tax year, or pay a fine. Under normal circumstances, you can only enroll for a new health care plan through the public marketplace during the open enrollment period. However, if you are not currently insured, being married gives you the opportunity to sign up for health insurance through the exchange usually for up to 60 days from the date of your marriage. Also, under most health insurance plans, you are able to add your spouse to your coverage even outside the regular open enrollment period.

File Jointly or Separately?

If you are married as of December 31, then as far as the IRS is concerned, you are considered married for the entire year. This gives you two tax filing options; married filing jointly, and married filing separately. The IRS heavily favors the married filing jointly option, and this tends to be the best option for most married couples. There are some rare instances, however, when married filing separately might work to your advantage. For more details on the advantages and disadvantages of each option, speak with your tax professional.

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