How Does Marital Status Affect Your Taxes?

It’s the time of year when couples like to tie the knot. The beautiful weather and flowers in spring and early summer make having an outdoor wedding an occasion to remember. But in all the excitement, it’s easy to forget about tax issues that need to be addressed when you get hitched.

What to Do if You Plan to Change Your Name

One of the first things to remember once you get back from the honeymoon is to notify the Social Security Administration (SSA), if you plan to change your name. Your tax return must match the name you’ve registered with the SSA in order to avoid problems. You’ll also need to get an updated Social Security card with your new name. Simply submit Form SS-5, the Application for a Social Security Card, and allow yourself at least two weeks for the change to go into effect. You can find more information at socialsecurity.gov.

How to Change Your Address

If you have a new address, notify the U.S. Postal Service as soon as possible so your mail delivery won’t be interrupted. The post office sends your new information to the IRS. However, I also recommend that you notify the IRS directly about your address change using Form 8822, especially if you’re expecting a tax refund.

How to Decide You Tax Filing Status

It’s important to decide which tax filing status you’re going to use for the year in which your marital status changes. Your filing status is vital because it determines the amount of tax you have to pay. It affects the amount of your standard tax deduction, whether you’re eligible to claim certain tax deductions and credits, and your income tax withholding. So be sure to complete a new Form W-4, the Employee’s Withholding Allowance Certificate, for your employer.

Your marital status on December 31^st determines whether you can consider yourself married for that entire tax year.

There are five different filing statuses for taxpayers:

1. Single status applies if on the last day of the year you were unmarried or were legally separated or divorced from your spouse.
2. Married Filing Jointly status applies if on the last day of the year you were legally married and is one of two options for married people. Filing a joint return allows spouses to combine income, exemptions, and allowable deductions on one tax return. It gives you more tax benefits and usually results in lower taxes than filing separately.
3. Married Filing Separately status applies if on the last day of the year you were legally married and is your second option if you’re married. It generally offers the least beneficial tax treatment, but may be necessary if one spouse doesn’t agree with the other about taxes. For instance, one wants to file taxes but the other wants to skirt the law, or one spouse doesn’t want to take joint responsibility for the other’s tax messes.
4. Head of Household status applies if you’re considered unmarried on the last day of the year, paid more than half the cost of keeping up your home, and had a qualifying dependent live with you for more than half the year. This status gives you more tax benefit than filing as a single taxpayer or as a married person filing separately.
5. Qualifying Widow or Widower with Dependent Child status applies if you’re unmarried, due to the death of your spouse within the last two years, and you’ve cared for a dependent all year. After two years, if you remain unmarried, your filing status must change to either single or head of household.

You must choose one status for each tax year, so always choose the one that results in the least amount of tax. Whether you’re getting married, or are a guest or chronic wedding crasher, have a great time!

(Photo by Gatis Orlickis)