9 Financial Steps to take when you get Married!

Congratulations on your recent marriage! As you embark on this exciting new chapter, it’s essential to address the tax implications that come with your marital status change. Here’s a comprehensive checklist to help you navigate the tax changes and ensure a smooth transition into married life.

1. Report Name Changes

If either spouse has changed their name, it’s crucial to update this information with the Social Security Administration (SSA). The name on your tax return must match SSA records to avoid potential refund delays. To update your name:

• Complete Form SS-5: This is the Application for a Social Security Card.
• Submission Options:
  • Visit SSA.gov to download the form.
  • Call the SSA at 800-772-1213.
  • Visit your local SSA office.

2. Update Your Address

If you’ve moved after getting married, ensure all relevant parties have your new address:

• Internal Revenue Service (IRS):
  • Submit Form 8822, Change of Address.
• United States Postal Service (USPS):
  • Update your address at USPS.com or visit your local post office.
• Employers:
  • Provide your new address to your HR department to ensure you receive important tax documents.

3. Adjust Your Withholding

Marriage can affect your tax bracket and withholding amounts. To ensure the correct amount is withheld from your paychecks:

• Submit a New Form W-4:
  • Provide your employer with an updated Form W-4, Employee’s Withholding Certificate, within 10 days of your marriage.
• Use the IRS Tax Withholding Estimator:
  • This tool helps determine the appropriate withholding amount based on your new marital status and combined income.

4. Choose the Right Filing Status

As a married couple, you have two filing options:

• Married Filing Jointly:
  • Often results in a lower tax liability and provides access to various tax credits.
• Married Filing Separately:
  • May be beneficial in certain situations, such as when one spouse has significant medical expenses.

It’s advisable to calculate your taxes both ways to determine which status is more advantageous for your specific situation to avoid negative tax implications and marital status changes.

5. Review Health Insurance Coverage

Marriage is a qualifying life event that allows you to make changes to your health insurance:

• Employer-Sponsored Plans:
  • Evaluate both spouses’ plans to decide whether to combine coverage or maintain separate policies.
• Health Insurance Marketplace:
  • If you have coverage through the Marketplace, report your marriage to adjust your premium tax credit accordingly.

6. Update Beneficiary Information

Ensure that your spouse is listed as the beneficiary on important accounts:

• Retirement Accounts:
  • Update beneficiary designations on 401(k)s, IRAs, and other retirement plans.
• Life Insurance Policies:
  • Review and update beneficiary information to reflect your new marital status.

7. Understand the Marriage Penalty or Bonus

Combining incomes can affect your tax bracket:

• Marriage Penalty:
  • Occurs when combined incomes push you into a higher tax bracket, resulting in higher taxes.
• Marriage Bonus:
  • Happens when one spouse earns significantly more, potentially lowering the overall tax rate.

Use the IRS Tax Withholding Estimator to assess how your combined incomes will impact your tax liability.

8. Be Aware of Tax Scams

Newlyweds should remain vigilant against tax-related scams:

• IRS Communication:
  • The IRS will never initiate contact via email, phone calls, social media, or text messages.
• Verify Tax Liabilities:
  • To check if you owe taxes, access your tax account information on IRS.gov.

9. Consult a Tax Professional

Given the complexities of tax laws, especially after marriage, consulting a tax professional can provide personalized advice tailored to your situation.

By proactively addressing these tax considerations, you can ensure a seamless transition into married life and avoid potential issues during tax season.

Contact our team to get started!