If wedding bells are in your future – congratulations! During these summer months we know a lot of lucky couples are in the midst of planning their special day. Whether it will be a posh formal affair, an intimate gathering of family and friends or a destination wedding, the checklists may seem endless. However, one thing you may not have thought of is the tax issues involving the change in your marital status. I know it’s certainly not as exciting as menu choices and flower arrangements, but with just a little research and understanding you will have one less thing to worry about when you return from your honeymoon.
Some tips to help you avoid future tax issues:
- Changing Your Name – If you plan to change your name, the Social Security Administration (SSA) needs to be informed. Your social security number remains the same; however you need to file Form SS-5 to obtain a new social security card to reflect the name change. Visit SSA.gov for more information.
- Changing Your Tax Withholdings at Work – The change in your marital status will require you to provide to your employer a new Form W-4 (Employee’s Withholdings Allowance Certificate). Assuming both you and your spouse are working, you may be moved into a higher tax bracket. IRS.gov has a few helpful tools, including a withholding calculator and instructions for completing Form W-4.
- Changing Your Address – If your address will be changing it is a good idea to let the IRS know. Also available on IRS.gov is Form 8822 (Change of Address) which is used to report your address change. Another reminder, don’t forget to have the U.S. Postal Service forward your mail.
- Changing Your Filing Status – The date set for your special day does not matter when it comes to your income tax filing status. As long as you are married on or before December 31st the IRS considers you married for the entire year. Come next April 15th you and your spouse can choose to file a married joint tax return or married separate returns. It is important find out which filing status will calculate the lowest tax. Your CPA or tax advisor can help in this area and advise you accordingly based on your particular financial situation. [Same-sex married couples – if you are legally married in a country or state that recognizes same-sex marriage then the federal government (IRS) will recognize your married filing status on your federal return. It doesn’t matter if you and your spouse live in a country or state that doesn’t recognize same-sex marriage. If this situation applies it may be helpful to seek a professional tax advisor who can address the nuances of the tax law of your State.]
- Circumstances Changes – In 2014, under the Affordable Healthcare Act, you may have purchased Health Insurance within the Health Insurance Marketplace. This may have made you eligible for a premium tax credit to offset the cost of the insurance. You will need to report changes in circumstances such as your income or family size to your Health Insurance Marketplace. This will ensure that you get the proper type and amount of financial assistance.
Getting married is an exciting (and busy) time in your life. Hopefully, these tips have helped cross off at least one thing on your growing to-do list. Now off to finalizing the guest list!