With the summer wedding season in full swing, the Internal Revenue Service advises the soon-to-be married and the just married to review their changing tax status. 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 some tips for newlyweds.
- 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. File a Form SS-5, Application for a Social Security Card, at your local SSA office. The form is available on SSA’s website at www.ssa.gov, by calling 800-772-1213 or at local offices.
- Notify the U.S. Postal Service – You should also notify the U.S. Postal Service if you move so it can forward any IRS correspondence or refunds. Also, be sure to change your address on your next tax return.
- 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 www.irs.gov to assist you in determining the correct amount of withholding needed for your new filing status. The calculator will give you the information you need to complete a new Form W-4 (Employee’s Withholding Allowance Certificate). You can fill it out and print it online and then give the form to your employer(s) so they withhold the correct amount from your pay.
- Select the right tax form – Choosing the right individual income tax form can help save money. Newly married taxpayers may find that they now have enough deductions to itemize on their tax returns. Itemized deductions must be claimed on a Form 1040, not a 1040A or 1040EZ.
- Choose the best filing status – A person’s marital status on Dec. 31 determines whether the person is considered married for that year. Generally, the tax law allows married couples to choose to file their federal income tax return either jointly or separately in any given year. Figuring the tax both ways can determine which filing status will result in the lowest tax, but usually filing jointly is more beneficial.
And finally–
The staff at Herring CPA Group is a great resource for answering any tax questions you may have and helping you get a good financial start in your new marriage. We can help with setting up a budget, developing a strategy for getting out of debt, and starting a savings plan for your future. Give us a call!
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