5 Tax Moves to Make if You’re a Newlywed (Once the Honeymoon Is Over)
You did it. You found your soulmate, successfully wooed them, went through the requisite ups and downs of dating, and now you’ve finally tied the knot and said “I do.”
It’s probably safe to assume that the very last thing on your mind in this time of marital bliss is the tax code. But alas, Uncle Sam does not make exceptions for the starry-eyed!
Now that you’re joined in matrimony, there are a few steps you need to take to ensure everything is up to date and reflective of your exciting new life together.
But don’t worry: They needn’t be a serious source of stress. You can probably get most of these simple tasks done well before you get your edited wedding photos back — but they can at least wait until after the honeymoon.
5 Steps for Filing Taxes the Year You Get Married
Here are five not-so-scary tax tasks to add to your to-do list as a newlywed.
1. Officially Change Your Name (if Applicable)
If you’re taking your partner’s last name, hyphenating yours, or — my favorite option — making up a new one together, the Social Security Administration needs to know about it. You can fill out an SS-5 form to apply for a new Social Security card and mail it, along with documentation of your old name and your marriage, to your local Social Security office. (You can also contact the SSA at 800-772-1213 to have one mailed to you.)
2. …and Your Address
These days, many couples live together before they take their vows.
But if you’re old-fashioned (or just didn’t want to share a tube of toothpaste until the last possible moment), don’t forget to inform the IRS of your new address. You can do this by filing IRS Form 8822, or by mailing them a letter containing your full name, your new and old addresses, your Social Security number, and a signature.
3. Decide How You’re Going to File
In that sacred moment when you pledged your whole heart to your beloved, you also changed your tax filing options. Now, instead of being able to file as a singleton, you get to choose between two alternatives: filing jointly or married filing separately.
The vast majority of married couples file jointly — and it’s almost always a better idea. For one thing, there’s less paperwork involved, which is inevitably a welcome occurrence around Tax Day.
Furthermore, filing separately can reduce the tax breaks and benefits you’d be eligible for if you were filing jointly, such as the child and dependent care tax credit, the Earned Income Credit, the student loan interest deduction, IRA contribution deductions and more.
Of course, in some cases, it may be advantageous to file separately regardless; everyone’s finances are different. For instance, if one of you can itemize enough deductions to surmount the $24,000 standard deduction for couples filing jointly, you might want to file separately to take advantage of that perk.
Filing separately can also translate to lower monthly student loan payments if one or both of you are on an income-based repayment plan.
The best way to figure out which filing option works best is to calculate your tax liability both ways — or to hire an accountant, if you can foot it.
Regardless of the month of your wedding, your tax status will cover the entire year so long as you’re considered married by Dec. 31.
4. Update Your W-4
Mazel tov: Your marriage most likely means you’re eligible for lower tax withholdings! Of course, in order to enact this change, your employer needs to be informed — and we don’t just mean strolling by your manager’s office to show off that big, shiny rock on your finger.
You’ll need to request a new W-4 and update your withholdings, which is fortunately pretty straightforward: Just tick the “married” box this time. There is also an option to state that you’re married but request withholding at the higher single rate… but while that might mean a bigger refund come tax time, it also means you’re basically giving the government an interest-free loan.
5. Inform the Health Insurance Marketplace.
If you buy your health insurance through the marketplace, getting married counts as a major change in circumstances and could result in a shift in your eligibility for the premium tax credit — a refundable credit that helps eligible individuals and families cover the cost of monthly premiums.
Namely, if your new, joint income is over the threshold, you may lose some or all of your eligibility… and although nobody wants to suddenly have to pay more each month for their health insurance, if you wait until tax time to fess up, you may end up facing a hefty bill when you’re asked to pay back a year’s worth of credits.
And who knows? You could also learn that you were actually entitled to more credits now — so either way, it’s definitely worth coming clean sooner than later.
That’s all there is to it! Now that we’re done talking about the least sexy topic on earth, maybe you should get off the internet and go give your partner a smooch.
After all, you (hopefully) didn’t get married just for the tax benefits.
Jamie Cattanach’s work has been featured at Fodor’s, Yahoo, SELF, The Huffington Post, The Motley Fool and other outlets. Learn more at www.jamiecattanach.com.