Five Tax Tips for Recently Married Taxpayers
Are you getting married this summer or in the near future? If you recently got married or are planning a wedding, the last thing on your mind is taxes. However, there are some important steps you need to take to avoid stress at tax time. Here are five tips from the IRS for newlyweds to keep in mind.
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Notify the Social Security Administration. Report any name change to the Social Security Administration, so your name and Social Security Number will match when you file your next tax return. Informing the SSA of a name change is quite simple. File a Form SS-5, Application for a Social Security Card, at your local SSA office. The form can be downloaded using the link provided or you can obtain one by calling 800-772-1213, or by visiting a local office. By not taking this step, if you use your married name on your tax return instead of the one that is on file, you can experience significant delays in receiving any tax refunds due to you next filing season.
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Notify the IRS. If you have a new address you should notify the IRS by sending Form 8822, Change of Address.
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Notify the U.S.Postal Service. You should also notify the U.S. Postal Service when you move so it can forward any IRS correspondence.
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Notify Your Employer. Report any name and address changes to your employer(s) to make sure you receive your Form W-2, Wage and Tax Statement, after the end of the year.
- Check Your Withholding. If both you and your spouse work, your combined income may place you in a higher tax bracket. You can use the IRS Withholding Calculator available on the IRS website to assist you in determining the correct amount of withholding needed for your new filing status (We are available to assist with this, as it can become a little complicated when you start including credits and deductions in the calculation). If necessary, please download a new Form W-4, Employee's Withholding Allowance Certificate, which you can print out and give to your employer so they can withhold the correct amount from your pay.
Be careful when adjusting your withholding, because there is a benefit to leaving them as they are. If you are someone that prefers the larger tax refunds, you might want to leave your withholding alone since that will ensure you a larger refund. When you file your next years' taxes, you will file as married-filing-joint, but you will have been paying taxes on your paycheck as if you were still single, which is a higher tax rate. Of course, we recommend you adjust your taxes so you break even and don't lend the IRS any money to draw interest on and eventually refund to you, but we know that most people enjoy getting a larger refund no matter what it takes to make it happen. In either case, it is always recommended that you consult a tax professional, preferably Barbara J. Vondra, CPA, before making any adjustments that could prove detrimental in the long run when taxes are due.