Marriage brings about many exciting changes. While taxes might not be at the top of your list — with a little digging, you'll realize valuable benefits. Here is a handy guide for your first set of taxes as newlyweds to help you reap the rewards you deserve.
To start, you want to be certain your W-2s and any other tax forms arrive at your new address. Make sure to contact both the IRS and Social Security Administration as well as your HR department with the new info.
To officially change your name, there are three ways you can go about doing this.
To change your address, complete an official change of address form (Form 8822, Change of Address) so that the IRS gets properly notified. Also be sure to have your mail forwarded by visiting USPS.com, or visit your post office to change it.
Just because your tax status has changed as a married couple, it doesn't mean your taxes should be a guessing game. It is simple to input some basic info about your combined finances into an estimator. You will get a solid estimate as to what you might be expected to pay or what you may be looking at for a refund.
It makes sense to be prepared as part of your personal budget — especially if you wind up owing money to the IRS. 1040.com offers a simple, free tax estimator. You can also download it as an app for your smartphone.
Now that you have estimated what your taxes will be, double-check to see if your marital status shifts you into the next tax bracket. Whether or not you decide to file a joint return, you may still be moved into the next bracket because you are now married. This is important information that will help you in your decision to file jointly or separately.
Here is some further info on how tax brackets work.
When you file your taxes jointly, you will be filling out one tax return for both of you. Chances are filing jointly will boost you to the next tax bracket. That being said, this typically means more tax breaks because you can combine both credits and deductions.
Some couples may decide they want to file separately because of a large income difference, or they want to keep their finances separate. One thing to keep in mind is that typically couples do get an overall greater tax benefit if they file jointly. For more insight on this decision, check out this article from the IRS.
There is no time like the present to start thinking about next year's taxes. Make sure there is enough being withheld from your paychecks as you go through 2019. This will ensure that next year you will owe very little in taxes as a married couple. If you want help with how many allowances to claim on your W-4, check out this helpful IRS Withholding Calculator.
In the flood of emotions around marriage, it's easy to miss some of the more concrete benefits. Specifically, there are myriad tax breaks that you and your partner can receive if you take the time to read the fine print! We've highlighted a few below:
If you want to really crunch the numbers, the Tax Policy Center at the Brookings Institution has a handy Marriage Tax Calculator.
When two people merge their assets, they often end up with a much higher net worth. In some cases, it can be extreme (e.g., if one partner has a higher income or inherited wealth). Of course, this is a wonderful thing — but it can quickly become a burden if you don't know how to manage it. You can start to lose track of income streams, charitable donations, blow your personal budget, and lose money by not keeping pace with inflation.
In these instances, it can be helpful to seek professional advice. According to SmartAsset, an initial consultation runs between $1,500 to $2,500. If you agree to ongoing portfolio management, this generally costs 1% to 2% of the assets under management (AUM) — which can be well worth it if you're in the dark about managing your wealth.
We've given you a taste of what your rewards can be if you do your homework. Dig into the links and advice above and reach out or comment with your thoughts and questions. Bon Voyage!