Newly Married: That Means Tax Changes

You are now married and you are different, in the eyes of the IRS. Even if you were married on December 31 of 2009, the IRS sees you as having been married for a whole year, not a day.

So what changes should you be aware of? First, you should fill out a new W-4 form for withholding. You have a choice of filing for married withholding status or single withholding status. Less will be taken out if you file as a married person. Consider what you might need to avoid paying money into taxes, but don’t leave yourself short for monthly needs.

Second, you will want to inform Social Security if you have a name change; that will keep the transition smooth, and you’ll avoid extra time for processing your tax return.

You can file your taxes jointly or as married, filing separately. The better choice is usually the married, filing jointly status for the best breaks, but there are times when filing separately would be best. For example, if one person has high medical expenses, because your itemized medical expenses have to exceed 7.5% of your adjusted gross income (AGI), you have a better chance of meeting that condition with one income, especially if it’s lower than your spouse’s.

If you have a child in your first year of marriage be aware of child-care credits, child tax credits, and dependent deductions. If you bought a house and did not close on it until after your marriage, you both have to be eligible for the Home Buyer Tax Credit ($8,000). If one of you is not eligible because of income or having previously owned a house, you will not get the credit, even if one spouse does qualify for the $6,500 credit as a previous home owner. We hope you closed before walking down the aisle.

For the first time filing a tax form as a newly married couple, it may be best to have a tax preparer do your forms. Marriage is a big life change and is usually accompanied by other life changes. It is good to have a qualified tax preparer go over some of the things that may have changed for you both over the last year which could mean changes in your taxes, things like a new job, moving, or selling investments.

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