The year of social distance and confinement made many people postpone their marriage for not being able to celebrate the event in the way they had dreamed of. But normal life is returning and, with it, weddings return. How can marriage affect a couple’s tax situation?
The arrival of summer is also the start of a much-awaited wedding season, and the IRS has reminded people how saying “I do” can affect a couple’s tax situation. What things change when you tie the knot?
Marriage changes many things and taxes are one of them, and this is why the agency is telling newlyweds should know how it can affect their tax situation.
Here's a tax checklist that newly married couples must bear in mind:
Name and address changes
• Name. If you choose to change your name when you get married, it is important to report that change to the Social Security Administration, because the name on a person's tax return must match what is on file at the SSA. If it doesn't, it could delay any tax refund so, 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.
• Address. If getting married means a change of address, the IRS and U.S. Postal Service need to know, that is why people 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.
• Married people can choose to file their federal income taxes jointly or separately each year. While filing jointly is usually more beneficial, it's best to figure the tax both ways to find out which works best. Remember, if a couple is married as of December 31, the law says they're married for the whole year for tax purposes.