So you got married in 2014 — congratulations! With marriage comes great adventure, life changes and a new way of filing your taxes.
But the IRS makes it easy with a simplified view of marriage. Your marital status for the tax year is based solely on your marital status as of Dec. 31. In other words, whatever your status is on New Year’s Eve is how you need to file.
If this is all news to you, don’t worry. Here are five key tax-related things newlyweds need to think about when filing taxes this year:
1. What’s in a name? If you or your spouse changed a name after your nuptials, it’s important that you notify the government and your employer of the change. If you don’t take this step, you may end up with a headache when it comes time to file as a couple. The first step is to notify the Social Security Administration so your filings (and refund!) aren’t delayed. The IRS uses records from the SSA to match names and Social Security numbers. If they don’t match, your e-filed tax return could be rejected. You’ll also want to make sure your human resources department at work is aware of your name change and any change in address before it mails your W-2 to you.
2. Decide how to file . Once you are married, you and your spouse will automatically be moved into a new filing status — married. However, that doesn’t mean you have to file jointly. Typically, most married couples receive better tax benefits when they file jointly because joint returns are taxed at a lower rate. In addition, some tax credits and deductions are only available when jointly filing with a married status. Usually, it’s best to file jointly, but there are a few situations when filing separately is more beneficial. For instance, if you and your spouse are both high-income earners, you may want to look into filing separately. Your accountant or tools like TurboTax can help you figure out what filing status is the best choice for you and your partner. This rings true for same-sex couples as well, as long as they are legally married in a state that recognizes same-sex marriages.
3. Write it down . When you were single, your deductions may not have been significant enough to file for anything other than the standard deduction. However, as a duo, things might have changed. Sit down with your spouse, and map out all possible items you can write off. Did you donate to charities, take a college course, purchase a new home or have significant business expenses? Those can all lead to tax deductions and credits. For next year, consider tracking these types of write-offs year-round in a spreadsheet, so it will be faster to file in 2016.
4. Adjust your tax withholding . As a refresher, your tax withholding is the amount your employer takes out of each paycheck to cover taxes. Depending on your financial situation, you might need to withhold more or less after you marry. If you and your partner both work, your combined income may put you in a higher tax bracket, increasing your tax liability. Make necessary adjustments by filing a new W-4 form with your employers. If you aren’t sure what withholding makes the most sense, the IRS and other tax tools offer withholding calculators so you can make sure you’re optimizing your adjustment.
5. Parents, take a (tax) break . If you also became a parent this year, or you’re planning on becoming one next year, there are a few tax tips to take into consideration. New parents can earn a child tax credit, where you can claim up to $1,000 for every kid under 17 years old in your household. For children 13 years old and younger, child care, day camps and before-and-after-school programs can qualify for the dependent care tax credit. That means families can deduct up to 35 percent of the costs for care ($3,000 maximum for one child or $6,000 maximum for two or more). If you’re trying to get a jump-start on college expenses, you’re also in luck! Most states offer tax deductions for residents who contribute to a state-sponsored college savings plan .
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5 Things Newlyweds Need to Know About Taxes originally appeared on usnews.com
