My wife and I have been married for 10 years this year, so we’ve been filing taxes as married filing jointly for some time now. While it isn’t very confusing for me anymore, I can still remember those first couple of years filing as a married couple, and how we weren’t sure whether we were doing things right — or if we would be better off filing married filing separately.
So how do your taxes change when you go from single to married? What things should newlyweds consider after their big day? Let’s take a look.
Filing Married Filing Jointly Vs. Married Filing Separately
One interesting thing about getting married and taxes is that if your nuptials take place at the end of the year, even on the last day of the year, you’re still considered married for the entire year. So if you have a New Year’s Eve wedding, for tax purposes you’re considered married for that entire year!
One of the first things you’ll need to do when filing is to choose what your filing status will be, either married filing jointly or married filing separately. For most people, married filing jointly will be the best choice and will save money on taxes. Married filing separately will often mean losing certain deductions and a more complicated filing in many states. There are some exceptions, however, when filing separately will mean a better result.
Your best bet is to use an online tax preparation software program to do your taxes using both filing statuses. That way you’ll be able to see which filing status is more beneficial for your situation.
Check Your Withholding To Avoid Surprises
One thing a lot of folks don’t think about is that they may need to adjust the withholding on their paychecks when they get married to avoid a surprise hit when the tax deadline arrives. Getting married and having a dual-income household can mean that your tax rate will go up along with the income. If you don’t adjust your withholding using the W4 form, you may end up owing a big tax bill come April.
Your best bet is to figure out what your withholding should be via the IRS withholding calculator, and then adjusting your paycheck withholding as soon as you can.
If you’re changing your name when you get married, you’ll also need to deal with the hassle of updating all the government records with your new name. Make sure the Social Security Administration is notified of your name change, otherwise your taxes could be rejected because the name and Social Security number on your return don’t match.
Also, don’t forget to update your address if you moved when you got married. You can do that in advance by notifying the IRS with Form 8822, or just update it when you file.
Some Will See a Marriage Penalty (Or Bonus!)
Some people will receive a higher tax bill when they get married than they would have if they filed as singles. Some people call this the “marriage penalty” — when a couple has similar incomes, the combined income from the joint return will bump them up into a new tax bracket, resulting in higher taxes.
The flip side of the coin is that in some instances, when there is a big difference in income, a joint return can actually mean a marriage bonus of sorts. For example, if one spouse earns $60,000 and is in the 25 percent tax bracket for single filers, all income over $35,350 would be taxed at that rate. If he or she gets married to someone who earns $10,700 or less per year, their entire income would now be taxed at 15 percent instead because the marginal tax rates for married filing joint returns are higher. Marriage bonus!
Marriage Means Big Changes
When you get married, you’ll see a lot of changes happening in your life, and taxes are no exception. You’ll need to update your information, figure out how to file, adjust withholding and more. It can be daunting, but once you’ve done it that first year it gets easier every time. So best of luck and congratulations on your new life together!