Congrats on getting hitched! Finally saying “I Do” is one of the most exciting moments of your life, and it marks the beginning of many big changes. One of those not-so-pleasant changes? Taxes. Filing a tax return changes a lot when your status changes from single to married, so it’s important for couples to know what to expect. Take a look at some of the most important adjustments you’ll have to make during married life!
Adjust Your Employer Tax Withholding
After tying the knot, both of you will need to revise your Form W-4 with your respective employer. This form helps your employer determine how much money to withhold from your paycheck each cycle for tax purposes. Make sure to complete this step within 10 days of getting married so you can have an accurate withholding in the upcoming tax season.
Keep in mind that come April 15th, your withholding amount can make a big difference. If you and your spouse make relatively the same amount of money, your tax may be higher when you file jointly than when you file as unmarried individuals. To make sure you aren’t underwithheld, it’s critical to adjust the amount with your employers!
Notify the SSA About Name Changes
If you altered your name with the marriage, you’ll need to alert the Social Security Administration (SSA) to get an updated Social Security Card. Without taking this step, the IRS may withhold your tax refund because it won’t be able to match your name with the SSA database. To make tax season as smooth as possible, make sure to report your name change as soon as possible.
Consider Your Filing Status
If you get married before the end of the year, you are considered married for the entire tax year. You then need to choose whether you plan to file jointly or separately—there are pros and cons to both depending on your own unique situation. If one spouse earns a lot more than another, joint filing could bring you some significant savings on your tax payments. But if you have roughly the same income, it might be beneficial to file separately. It all comes down to your exact amount of income, the financial relationship you have with your partner, and which tax bracket you’ll fall under as a couple.
Take a Tax Break if You Have Kids
Did marriage come with a kid as well? Then you can earn a child care tax credit! Typically, you can claim up to $2,000 for every kid under 17 years old in your household. Day camps, child care, and before or after school programs can also qualify for the dependent care tax credit in the child is 13 years old or younger. This can be a great asset for families with several kids!
Keep Track of Deductions
While deductions might not have mattered much when you were filing as a single individual, they certainly will count now that you’re married. It’s a good idea to circle up with your spouse and made a list of all the items your can write off. Charitable donations, business expenses, college course, and other home-related expenses can all be included in this category. By lowering your adjusted gross income, you might be able to fit into a tox bracket with a lower rate.
So, are you ready to tackle taxes together as a team? Once you have these 5 tactics on lock, you’ll be a power couple worth reckoning with.