Tax Tips for Newlyweds
If you recently got married, plan to get married, or know someone who is taking the matrimonial plunge, here are some important tax tips every new bride and groom should know.
Tip 1 Notify the Social Security Administration (SSA) with any name change(s). The IRS has a name match program with the SSA and will potentially reject deductions and joint filing if the name change is not made timely. Do this by filing Form SS-5.
Tip 2 Update your address with the IRS if either of you is moving. You do this with IRS Form 8822.
Tip 3 Also change your name and addresses with your employer and the Postal Service to ensure your W-2s are correctly stated and delivered to the proper address.
Tip 4 If selling one or two residences, make sure you review how capital gains tax laws apply to your situation. This is especially important if one of you has only been in your home for a short time or if either home has appreciated in value.
Tip 5 Review legal documents to ensure legal titles are as you wish them to be. This includes bank accounts, titles on property, credit cards, insurance policies, and living wills.
Tip 6 Recalculate your payroll withholdings and file a new W-4. If both newlyweds work, your combined income could put you into a higher tax bracket. This phenomenon is referred to as “the marriage penalty”. By changing withholdings now, you can avoid a big surprise at tax time.
Tip 7 Review your employee benefits and make necessary changes in health care, insurance, retirement account beneficiaries, and tax preferred spending accounts. Marriage is a qualified event to make mid-year changes by most employees.