The popular spring and summer wedding season is upon us, and happy couples have a lot to tackle as they merge two lives into one. Beyond the financial basics like opening a joint bank account or setting a household budget, newlyweds also need to consider their tax situation. A change in marital status can impact tax status, so let’s take a look at some tasks couples will want to assess not long after the wedding day is over.
If you decide to take your spouse’s name, make sure the change is recorded with the Social Security Administration. To request a new Social Security Card, visit SSA.gov, call 1.800.772.1213, or visit your local SSA office. It is important that the name you use on your tax returns matches the one on file for you with the SSA. While you’re at it, make sure you also tell your employer about the name change and complete any necessary paperwork.
Is a new house part of your post-nuptial plans? If so, this is important news to tell not just the U.S. Postal Service, but also your employer and the IRS. Most employers still mail W-2s, so in order to receive an accurate form in a timely fashion, let your employer know of any address changes as soon as possible. The IRS may pick up the change of address request you submit to the Post Office, but to err on the side of precaution you can also notify them directly. Your tax preparer can assist you with Form 8822 to change your address with IRS.
If you and your spouse both work, combining your incomes could move you into a higher tax bracket. Your tax advisor can examine your income, withholding status and exemptions to maximize your tax savings. That way you can make any needed alterations to the amount of federal income tax your employers withhold from your paychecks.
To itemize or not itemize, that is the question. At least it is for newly married couples filing taxes jointly. Take the time to consider all the deductions you might itemize on your tax return – think mortgage interest, property tax payments, charitable contributions. If the total amount adds up to more than $12,600, which is the standard deduction, it may benefit you to itemize.
These are some initial steps to ensure a change in marital status is properly reported. For a full assessment of how other, more in-depth financial issues could change after marriage, please contact your RKL tax advisor.
Contributed by Chris A. Luppold, CPA, MBA, CGMA, a manager in RKL’s Tax Services Group. Chris has over 35 years experience in public accounting and provides services a wide range of areas including general business consulting, tax preparation, estate planning and tax planning for his clients.