The arrival of summer is more than just summer flowers, vacations, it is also the start of wedding season. Marriage changes many things, and taxes are one of them. Newlyweds should know that saying “I do” has many implications other than moving towards hopeful blissful enchantment and will affect your tax situation.
Change your Name with the Social Security Administration
When a name changes through marriage, it is important to report that change to the Social Security Administration. The name on a person’s tax return must match what is on file at the SSA. Failure to do so will delay the processing of any tax returns, and any potential tax refunds.
To update information, taxpayers should file Form SS-5, Application for a Social Security Card. It is available on SSA.gov, by calling 800-772-1213 or at a local SSA office.
Should you change your address both the IRS and U.S. Postal Service need to know. Taxpayers should send the IRS Form 8822,Change of Address.
Taxpayers should also notify the postal service to forward their mail by going online at USPS.com or their local post office.
After getting married, couples should consider changing their withholding. Newly married couples must give their employers a new Form W-4, Employee’s Withholding Allowance within 10 days.
If both spouses work, they may move into a higher tax bracket or be affected by the additional Medicare tax.
One can use the Tax Withholding Estimator on IRS.gov to help complete a new Form W-4.
Married people can choose to file their federal income taxes jointly or separately each year.
While filing jointly is generally more beneficial, it is best to figure the tax both ways to find out which works best.
Marital status is determined as of December 31 for the entire year.
The Fun Stuff
We have represented more than a few people who have found an extra unanticipated surprise or gift after they married in that their new loving spouse failed to inform the other that they have large tax debts which with marriage the other inherits.
While we all believe that the one that we are enamored with, and just cannot live without, is truthful, and has told you everything, that always is not the situation, and sometimes that little omission of tax debt when goes unsaid can have devastating implications once found. One should consider having a professional investigate that little matter along with other financial issues as we have found in more than a few cases ones loving partner did not quite let the other know that there were other reasons they were looking to get married.
In one instance we represented an individual who discovered that there was a tax debt amounting to several hundred thousand dollars, but only found out after their first child arrived leaving him in a situation that as you can imagine very limited alternatives other than to deal with that little surprise.
While the majority of marriages are entered into honestly, the reasons for marriage might not always be as one would assume, and while prenuptial agreements and such are generally not well received by one’s hopeful spouse, tax inquiries should be made, as distasteful as that might be. Any resistance to such inquiries by one’s betrothed might just be a signal that something might be amiss.