7 Tax Tips for Newlyweds

Wedding season is upon us all.  Most newly married couples do think about changes in their tax status.  Here are a few tax tips to consider.

Tip #1 – Filing Status

You are considered married for the entire year the day you get married.  This is true even if you are married on December 31.  You and your spouse may file jointly or separately.  Generally, there are tax advantages for filing jointly compared to filing separately.  However, if you file jointly, both you and your spouse are jointly liable for any taxes owed.

Legally same-sex married couples generally must file as married on the IRS tax return.  However, Michigan doesn’t recognize same-sex marriage.  A same-sex married couple living in Michigan files as married on the IRS tax return and single on the Michigan tax return.

Tip #2 – One Spouse Owes Taxes

You don’t owe any back IRS taxes but your spouse does.  If you file jointly with your spouse, you afraid the IRS will take the refund to pay your spouse’s back tax balance.  You have the option of filing for Injured Spouse.  File Form 8379, Injured Spouse Allocation, with your prepared IRS income tax return.  The purpose of Form 8379 is to calculate your portion of the refund.  The IRS will release your portion of the refund and apply your spouse’s portion of the refund to the back taxes.

Tip #3 – Establish an IRA for your Spouse

You are unable to take a deduction for IRA contributions because you are covered by a retirement plan at your work.  Your spouse is also not able to take a deduction for IRA contributions because your spouse doesn’t earn any income.  You may be able to make tax-deductible contributions to your spouse’s IRA.

Tip #4 – Name Change

Your name and social security number reported on your tax return must match the Social Security Administration records.  File Form SS-5, Application for Social Security Card, to change your name.

Tip #5 – Address Change

I recommend informing the IRS of your address change.  File Form 8822, Change of Address, with the IRS.  Using your new address on your most recent IRS income tax return is another way to inform the IRS of your address change.

Tip #6 – Change Tax Withholding

Ask your employer to change your status for tax withholdings.  Your employer will provide you with a new Form W-4, Employee’s Withholding Allowance Certificate.  When filling out Form W-4 considered the combined income of both you and your spouse.  Your income combined may put you two in a higher tax bracket.