It is summer time and wedding bells are ringing!
And while it may not be the most romantic of things to deal with for a new couple, with wedding season in full swing there are several tax-related issues that the just married or soon-to-be married should review due to their changing marital and tax status.
If you recently got married or are planning a wedding, I realize the last thing on your mind is your income taxes. However, there are some important steps you need to take to avoid unnecessary stress at the next tax time.
So here are some tips just 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.
This will avoid a letter from the IRS or even a rejection of an electronically filed return.
File a Form SS-5, Application for a Social Security Card, at your local SSA office.
The form is available on the SSA website at www.ssa.gov, by calling 800-772-1213 or at local offices (such as the one in Searcy or Little Rock).
Notify the IRS if you move - If you have a new address, you should notify the IRS by sending Form 8822, Change of Address.
You can download this form from www.IRS.gov or order it by calling 800-TAX-FORM (800-829-3676).
Notify the U.S. Postal Service - You should also notify the postal service when you move so it can forward any IRS correspondence or refunds.
Notify your employer – Be sure to give any name and address changes to your employer, including former ones, 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.
The IRS has a withholding calculator available on www.irs.gov that you can use to help you determine 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 out the W-4 and print it online, and then give the form to your employer so they withhold the correct amount from your pay.
Select the right tax form - Choosing the right individual income tax form when you file your taxes can really save you money.
Page 2 of 2 - Newly married couples may find that they now have enough deductions to itemize on their tax returns whereas you may not have done so before. If so, you will need to use a Form 1040 to file instead of forms like 1040A or 1040EZ that you may have used in the past.
Choose the best filing status - A person's marital status on December 31 determines whether the person is considered married for that year.
The tax law allows married couples to choose to file their income tax returns 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 a joint return will save you the most.
However, there are other factors to consider in whether to file a joint return or not, such as personal responsibility for a joint tax liability, so you may want to seek professional counsel.
Being newly married is an exciting time, and you don't need the headaches that can sometimes be associated with the change.
Taking care of these things now can help make the transition just that much smoother!
Lane Keeter, CPA is Office Managing Partner of the Heber Springs Office of EGP, PLLC, CPAs & Consultants