While there are many wonderful and fun things about marriage, it’s important to know that tying the knot affects your taxes as much as it affects your living situation (and, you know, the rest of your life). But before we get started on the changes, it’s important to note that marriage is a time-honored tradition of love and companionship, not a tax break. It’s true you get some benefits from the IRS when you’re married, but those aren’t the benefits you should focus on when deciding to get hitched.
Filing Status
If you’re legally married on December 31, you’re considered legally married for the full year in the eyes of the IRS, which is probably good news for the procrastinating elopers out there. More importantly, this means that you must file your taxes for that year as either “married filing jointly” or “married filing separately.” Generally, filing jointly provides the most beneficial tax outcome for the majority of couples. Keep in mind though, that if you’re married and file a joint return, your income is combined, which could bump one or both of you into a higher tax bracket with a higher rate of tax imposed on your income.
Document Changes
In addition to your change in filing status, a few other changes will need to be made to make sure your tax filing is accurate. If you’re planning on filing jointly, it may be wise to change your Form W-4 on file with your employer to reflect your new status. Claiming an additional allowance and/or changing withholding to the “married” rate means that less taxes are withheld from your pay. If you changed your name when you got married, you’ll need to make sure you’ve notified the Social Security Administration (SSA). Your return is filed under your Social Security number, so to avoid any errors or mismatches, wait until the name change process is complete to file your tax returns.
Exemptions and Standard Deduction
If you file jointly as a married couple, you get to claim two personal exemptions (one for each of you) on the tax return instead of one. Additionally, a dependent exemption is allowed for each child claimed as a dependent on the tax return. Filing jointly, you also have the highest standard deduction allowed on a tax return. For 2015, single taxpayers and married taxpayers filing separately are allowed a standard deduction of $6,300 whereas married couples filing jointly are allowed $12,600. However, once you’re married and own a home, many people find that it’s more advantageous to itemize their deductions rather than claim the standard deduction.
The Affordable Care Act
One day a blog post will go by where we don’t mention the Affordable Care Act, but today is not that day. With the ACA, you’re eligible to receive an advance tax credit to help pay your health insurance premiums if you purchase insurance through a Marketplace. If you or your new spouse receive advance payments of this credit, you should report your marriage (and any moves or change in income or family size) to the Marketplace so they can adjust your advance credit payments if necessary.
Whether you’re wrapped up in newlywed bliss or secretly loving that you’re now the cranky old married couple of the neighborhood, it’s important to remain informed when you file your tax returns. At ExpressIRSForms, we’re here to help in any way we can with the e-filing process. Just send us an email 24/7 at support@expressirsforms.com. You can also live chat us or give us a call Monday through Friday, 9 a.m. to 6 p.m. EST, at (704) 839-2270.
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