Tax Tips for Newlyweds
Tax Tips for Newlyweds
With the arrival of the warm summer months, comes the arrival of many newly married couples. Taxation for a married couple is different than taxation when you are single. This article will address some of changes newlyweds will face.
Changes. You will want to update any name and addresses changes with all the entities listed in this article.
If you or your spouse has a legal name change with the marriage, you must report your new legal name to the Social Security Administration.
For tax purposes, it is important that your new name matches the name associated with your SS# at the social security office. Non-matching names and social security numbers causes a problem at tax time and can delay any refunds you are owed.
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You can find the proper legal form (SS-5 Application for a Social Security Card) at the government website at http://www.ssa.gov or call 1-800-772-1213.
Additionally, update your name change with your employer and the Internal Revenue Service (IRS).
With marriage comes the decision to file your tax returns either jointly or individually. Filing your taxes jointly comes with some additional tax deductions and credits. Some situations call for people to continue to file individually. Alimony or child support and other scenarios that are based on your income for qualification are some of these situations.
A qualified accountant can give you advice or go ahead and use the IRS tools (http://www.irs.gov IRS withholding calculator) to figure out if it is better for you to add a different withholding amount on your employee tax form W-4.
Itemization. A qualified accountant can advise you on the best tax form to use come the beginning of tax season. Many people who file their taxes individually use the 1040EZ or the 1040A. Being married or making major purchases, like a home, could give you greater tax benefits with itemizing using the 1040 form.
Many married couples often buy a home within their first year of marriage. You can deduct a certain amount of points on your mortgage, interest, and taxes you paid.
Similarly, donating money, goods, clothes, or household items to charity is tax deductible. Make sure you keep the donations receipts to itemize during tax time.
Many employers offer matching contributions for retirement or 401k plans. Since this is free money, consider adding more into your retirement fund from each paycheck.
Protecting your future. Change beneficiaries on life insurance and financial accounts. Creating or revising wills to reflect your newly married status and choices are important.
From the start, add as much money as you can into savings. Most people are unaware of what the retirement years hold so it is important to know that everything will be more than covered.
When you start your life together, always have the end in mind. The end consists of how you want to live your life after you have worked hard. Do you want to own a house with no debt or would you like to travel the world and call every place home? Deciding what you want your future to look like will help you decide how you start your financial life together.