Things Newlyweds Can Do to Prepare for Taxes
Congratulations on your marriage. Marriage is a very exciting thing and the last thing you want to ruin your newlywed experience is talking about taxes. However, we feel it is best that you get it out of the way as soon as possible while everything is still fresh on your mind.
This way you do not have to worry about any financial issues further down the line. Many couples focus on getting joint bank accounts yet taxes are something that they do not consider. Nevertheless, taxes sneak up on you and before you know it, the tax deadline will be here and you will be unprepared. However, there is no need to fret; we have provided you with some tips so you can be prepared when April rolls around.
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Alert the Social Security Administration of Name
When your wife changes her name, it is important that all of the offices know. If the brides name is not updated you will find yourself experiencing a lot of stress during tax season because nothing is going to match. The first office that you need to alert is the Social Security Administration (SSA).
The IRS consults their records to make sure your name and social security number match. In the event that your name and social security number does not match, your return could be rejected or the IRS is going to want to know why they do not match. If you are someone, who is depending on a tax refund this will be a major headache.
Married Filing Jointly or Separately
As soon as you are married legally, you only have two options available when it comes to your filing status. You have to file married, required by law, but you have the option to file jointly or separate. Usually, married couples get more tax benefits when filing jointly since they have a lower tax rate. Additionally, you can claim certain tax credits that are only available to those who file married filing jointly.
Sometimes it can be beneficial for married couples to file separately. If you earn about the same and are considered high-income earners, filing separately can be best, to avoid the “marriage penalty”.
If you file your taxes online, they will be able to assist you when it comes to deciding which filing status to file to get the maximum benefits.
When you marry your tax situation changes, which causes your withholding amount to have to be adjusted. Depending on you and your spouse’s situation, you may have to have more taxes withheld or less. It is especially important to consider your spouse’s work circumstances especially if they are considered an independent contractor.
If you need assistance at any time, you can always use the W-4 Withholding Calculator.
From the day you say “I Do”, it is important to make sure that both you and your partner keep all receipts that could qualify for tax deductions. Common deductions include donations, college courses, and purchasing a home. As a couple, with combined expenses, you may find yourself saving a ton of money when tax season comes around.
Utilize Planning Tools
There are numerous tax tools to help you prepare for the dreaded tax season, such as the tax refund calculator. You will be able to estimate what your tax situation will be and more. Tools should always be utilized so you can be a step ahead when tax season comes in.