If you recently got married, you might have spent a lot of time planning a ceremony, reception, or honeymoon. As a newlywed, have you considered how your new life change will affect your taxes this year? Here are some things you should keep in mind when filing your taxes.
Name and Address Change
Before we get to the obvious changes like filing status, one of your first actions should be to report your name change to the Social Security Administration (SSA) if necessary. The name on your tax return must match the one on file with the SSA or else it can cause delays in processing your return or refund. You’ll also want to make sure you update the IRS and USPS of a change in address if paper mail is your preference for correspondence or refund payment.
While adjusting your tax withholding with your employer is not necessary, it can help avoid any overpayment or underpayment in taxes throughout the year. You can use the IRS Online Withholding Calculator to find out how much you should withhold. Once you determine the best option for you and your spouse, you should submit a new FormW-4 to your employer.
Getting married could change your tax bracket if you file together since your income is combined with your new spouse’s. Here are the tax brackets for the 2022 tax year:
|Tax Rate||Married Filing Jointly||Married Filing Separately|
|10%||$0 -$20,550||$0 – $10,275|
|12%||$20,551 – $83,550||$10,276 – $41,775|
|22%||$83,551 – $178,150||$41,776 – $89,075|
|24%||$178,151 – $340,100||$89,076 – $170,050|
|32%||$340,101 – $431,900||$170,151 – $215,950|
|35%||$431,901 – $647,850||$215,951 – $323,925|
|37%||$647,851 or more||$323,926 or more|
You might be used to filing single each tax season, but as a newlywed that will no longer be an option. You’ll either file married filing jointly or married filing separately. Most couples will opt for a joint return as it opens access to more tax breaks and sometimes a better tax rate. Every situation is different, so your best bet may be to prepare your tax return both ways to see which has a better outcome.
Married couples filing jointly can claim one of the largest standard deductions at $25,900 if you are both 65 and under. If you file separately, you can only claim the $12,950 standard deduction. You should note that if one spouse opts to itemize, both of you must itemize, so you should determine which method would result in a lower taxable income.
Tax Credits and Deductions
As mentioned, filing separately eliminates eligibility for some tax credits. For example, couples married filing separately may not claim the Earned Income Tax Credit (EITC) or education credits like the American Opportunity Credit or Lifetime Learning Credit. They might be able to claim the Child and Dependent Care Credit if they meet certain requirements. They also cannot deduct student loan interest. On the other hand, married couples filing jointly have extra tax perks to look forward to. For example, if you are not working you cannot contribute to an IRA account if you are single, but you can if you are married and use your spouse’s income. You can also take advantage of flexible spending accounts (FSAs) and lower health care expenses. You can consult with a tax preparer for more tax breaks.
Tax Help for Newlyweds
Taxes are sure to be the furthest thing from your mind after getting married, but it’s critical to remember that as long as you are legally married by December 31st, the IRS considers you to be married for the full tax year. The sudden change in rules may be intimidating and brand new to you, but there are always experts who are ready to help. If you need tax help, contact Optima Tax Relief at 800-536-0734 for a free consultation.