Getting married this summer? 5 tips for a smooth tax transition
Congratulations! You’ve tied the knot and cut the cake. Newlyweds have a lot to think about and taxes might not be on the list. However, there is good reason for a new couple to consider how the nuptials may affect their tax situation.
The IRS has some tips to help in the planning. Here are some simple steps to make your first income tax return together less stressful.
1) You should check your withholding at the beginning of each year or when your personal circumstances change — like after you’re married. This year, it’s even more important to check following major changes from the new Tax Cuts and Jobs Act. Using the IRS Withholding Calculator is a good way to check your withholding. If you need to change your withholding, submit a new Form W-4 to your employer.
2) Marriage can mean a change in name. If you legally change your name, it’s important to report that change to the Social Security Administration (SSA). The name on your tax return must match what is on file at SSA. If it doesn’t, it could delay any refund.
3) If marriage means a change of address, the IRS and U.S. Postal Service need to know. To do that, send the IRS Form 8822, Change of Address. Notify the postal service to forward mail by going online at USPS.com or at a local post office.
4) If you receive advance payment of the premium tax credit it’s important that you report changes in circumstances to your Health Insurance Marketplace as they happen. Certain changes to your household, income or family size may affect the amount of your premium tax credit. These changes can alter your tax refund, or cause you to owe tax. Reporting these changes promptly will help you get the proper type and amount of financial assistance. You should also notify the Marketplace when you move out of the area covered by your current Marketplace plan. Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Marketplace. Reporting changes will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advance.
5) Choose the best filing status. Your marital status on December 31 determines whether you’re considered married for that year. Generally, the tax law allows married couples to choose to file their federal income tax return either jointly or separately in any given year. Use the Interactive Tax Assistant to help determine what is best for you.
When it comes to wedding planning, details are important. Take these steps now to be sure your first tax season as a married couple goes smoothly as well!