Congratulations on your upcoming nuptials! You have the dress. The guest list is in order, but have you considered Uncle Sam in your wedding planning? The tax consequences of marriage probably aren't anywhere on your wedding to-do list. Understandable.
You can save this one for after the honeymoon, but when you get home here's what you need to get in order for your taxes.
1. From marital status to filing status.
So you've agreed on your florists, caterers, and your photographer. Have you agreed upon how you will file your taxes? (Now you may understand why I'm not invited to many weddings).
How you and your new spouse file can save you thousands of dollars. You can choose to file your federal income tax return either jointly or separately and it pays to have a tax pro run the numbers both ways. There are rules you need to be aware of. For example, if you choose to file separately and one spouse itemizes, both have to itemize, even if one would save more money with a standard deduction. Run a comparison both ways to determine which works best for both of you.
As long as you're married as of December 31, the IRS considers this to be your marital status for the whole year for tax purposes.
2. Dual income might mean a higher tax bracket.
If you both work, you should check the amount of federal income tax withheld from your pay. Your combined incomes may move you into a higher tax bracket. Use the IRS Withholding Calculator tool at IRS.gov to help you complete a new Form W-4, Employee's Withholding Allowance Certificate.
Speaking of which, whether or not you've invited your boss to your wedding, your employer needs to know of the change in your marital status if you adjust withholdings from your paycheck. Also, make sure to update your address to ensure that you receive your Form W-2, Wage and Tax Statement, after the end of the year.
3. What's in a name? You've agreed on the name of the band for your reception, but have you thought about your own name? If not, this could cause confusion down the road. The names and social security numbers on your tax return must match your Social Security Administration records.
If you change your name, remember to report it to the SSA and file Form SS-5, Application for a Social Security Card. You can access this on SSA.gov.
4. Here's to your health. While politicians battle over the best health plan for you, as of this column, Obamacare is still the law of the land. The Affordable Care Act and taxes have created a complicated and sometimes confusing match.
If you or your spouse bought a Health Insurance Marketplace plan and receive advance payments of the premium tax credit, it is important that you report changes in circumstances, to your Health Insurance Marketplace. This can affect your refund or balance due when you file your tax return.
5. Address change. You probably already know you should notify the US. Postal Service if you move (USPS.com). You may not think about letting the IRS know if your address changes. To do that, send the IRS Form 8822 - Change of Address. You can ask to have your mail forwarded online at USPS.com or report the change at your local post office.
Newlyweds, enjoy the journey! It's my experience that more money in your pocket helps tremendously.