Written by Iona Brannon; edited by Avril Ayers
March 31, 2023
- Most newlywed couples will want to file jointly, but it's not the right choice for everyone.
- When you can file as a married person depends on the year of your marriage license, not when you get married.
- If your tax situation changes year-to-year, you don't have to do the same thing every time.
Getting married is an exciting time and a significant milestone, but it also comes with new adjustments. Filing taxes may not be the most exciting part, but it's important to understand how marriage affects your taxes. Avoid any potential surprises come tax season with these essential steps for filing taxes as a newlywed.
1. Be honest with each other
If you want to successfully file taxes as a couple in a way that's mutually beneficial, you'll have to have candid conversations about your finances — ideally before you're legally bound. Each person's financial background is unique, and there isn't a one-size-fits-all solution.
To properly understand the tax implications of different strategies and filing routes, it's important to have a clear picture of what each of you bring to the table in terms of debts, income, and expenses.
Barbara Schreihans, founder and CEO of Your Tax Coach, stresses the importance of knowing each other's financial history. "If one spouse has significant legal liabilities, such as unpaid taxes or unpaid child support, filing separately can protect the other spouse from being held responsible for the debt."
2. Decide which filing status makes the most sense
The biggest tax question that newlyweds face is whether to file jointly or separately.
Dawn Patton, the founder of Patton Accounting & Tax, says that filing jointly is the best route for most tax paying couples, as newlyweds may miss out on certain tax credits and be subject to lower limits when filing separately. However, there are exceptions.
To assess which route to take, Schreihans recommends looking at income levels first. "Couples with similar income levels may benefit from filing jointly," says Schreihans. "Couples with a significant income difference may benefit from filing separately to avoid being pushed into a higher tax bracket."
The next thing to consider is itemized deductions, says Schreihans. "If one spouse has significant itemized deductions, such as medical expenses or charitable contributions, it may be beneficial to file separately to maximize the deduction."
Student loan debt can also play a part in your taxes. Filing jointly can potentially increase the monthly payments if one spouse is enrolled in an income-driven repayment plan.
Patton says that if a taxpayer suspects their partner may be committing tax fraud or expects to owe a substantial amount in taxes, it's best to forgo tax savings and file separately to avoid improper tax liability.
3. Plan ahead when getting a marriage license
Patton recommends planning ahead of tax-filing time and even potentially before your wedding.
"Getting married has the potential to drastically change your tax situation, so the sooner newlyweds consult with a knowledgeable tax accountant, the better," says Patton.
You can start planning your tax filing strategies as soon as you know the date of your marriage license, and if it's convenient enough, you may even consider planning your marriage license date accordingly.
"You are considered married for the entire year in the year you legally get married (meaning the date on your marriage license, not the date of your wedding)," explains Mia Lee, CPA. "For example, if your marriage license is dated January 15, 2023, but you had your ceremony on December 15, 2022, your filing status is married for the tax year 2023, but single for the tax year 2022."
Why is this important? Schreihans goes on to explain that as long as you're married by December 31 of a tax year, you can change your status to married filing jointly, which typically saves couples a significant amount of money in taxes.
4. Update your withholdings
"Another common mistake newlyweds make is not updating their withholdings," says Schreihans. "After getting married, couples may need to adjust their tax withholding amounts to reflect their combined income. When couples don't do this, they may end up owing taxes at the end of the year."
To calculate your withholdings, you can use the tax withholding estimator from the IRS. Once you know your estimated withholdings, you'll want to submit an updated W-4 form to your employer with the new information. This will ensure you're withholding enough taxes for your new circumstances.
5. Remember, you don't have to do the same thing each year
If you've already filed your taxes but circumstances have changed, or you've found it more beneficial to file another way, you can always change the next year's filing status.
"You can change your filing status from year to year as long as you meet the eligibility requirements," says Lee. That means you can decide each year whether filing jointly or separately makes more sense, though you still can't file as a single person as long as you're married.
If you're still unsure of how to navigate your taxes, speaking to an accountant is the best route to go. However, if you don't have the means to do that, Lee recommends comparing your options with tax filing software to find which filing status offers the largest refund and the lowest tax liability.
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