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A Newlywed’s Guide to Taxes

a newlywed's guide to taxes

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 is a newlywed’s guide to 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. If it doesn’t, 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.  

Withholding 

Adjusting your tax withholding with your employer is not necessary. However, 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. 

Tax Bracket

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 2024.

Married Filing Jointly

Rate Taxable Income Tax 
10% Income up to $23,200 10% of the taxable income 
12% Income between $23,201 and $94,300 $2,320 plus 12% of the excess over $23,200 
22% Income between $94,301 and $201,050 $10,852 plus 22% of the excess over $94,300 
24% Income between $201,051 and $383,900 $34,337 plus 24% of the excess over $201,050 
32% Income between $383,901 and $487,450 $78,221 plus 32% of the excess over $383,900 
35% Income between $487,451 and $731,200 $111,357 plus 35% of the excess over $487,450 
37% Income over $731,200 $196,670 plus 37% of the excess over $731,200 

Married Filing Separately

Rate Taxable Income Tax 
10% Income up to $11,600 10% of the taxable income 
12% Income between $11,601 and $47,150 $1,160 plus 12% of the excess over $11,600 
22% Income between $47,151 and $100,525 $5,426 plus 22% of the excess over $47,150 
24% Income between $100,526 and $191,950 $17,169 plus 24% of the excess over $100,525 
32% Income between $191,951 and $243,725 $39,1101 plus 32% of the excess over $191,150 
35% Income between $243,726 and $365,600 $55,679 plus 35% of the excess over $243,725 
37% Income over $365,600 $98,335 plus 37% of the excess over $365,600 

Filing Status 

You might be used to filing single each tax season. However, 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. Your best bet is to prepare your tax return both ways to see which has a better outcome.  

Standard Deduction 

Married couples filing jointly can claim one of the largest standard deductions in 2024 at $29,200 if you are both 65 and under. If you file separately, you can only claim the $14,600 standard deduction in 2024. 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. However, 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. We hope this newlywed’s guide to taxes gave some clarity. Optima Tax Relief is the nation’s leading tax resolution firm with over a decade of experience helping taxpayers with tough tax situations.  

If You Need Tax Help, Contact Us Today for a Free Consultation 

When to File Separately if You’re Married

when to file separately if youre married

Filing taxes as a married couple is a significant financial decision. While the default option for most couples is to file jointly, there are certain situations where filing separately can be beneficial. In this article, we will explore when it makes sense for married couples to consider filing separately and the potential advantages of doing so. 

Protecting Individual Finances 

One of the primary reasons couples may choose to file separately is to protect their individual financial interests. If one spouse has concerns about the other’s financial situation, such as unpaid taxes, outstanding debts, or a history of financial irresponsibility, filing separately can help shield the responsible spouse from any potential liability. 

Filing separately ensures that each spouse’s income, deductions, and credits are separate, reducing the risk of being held responsible for the other’s financial obligations. This can be especially important if you are not entirely confident in your spouse’s financial stability. 

Reducing the Impact of Student Loan Payments 

Student loan debt can be a significant financial burden, and how you file your taxes as a married couple can impact your student loan payments. When you file jointly, your combined income may result in higher monthly student loan payments due to income-driven repayment plans. 

Filing separately may allow the spouse with student loans to reduce their monthly payment, as only their individual income is considered for calculating the payments. This can free up more money for other financial goals or expenses, providing some financial relief. 

Maximizing Tax Benefits in Specific Situations 

In some cases, filing separately can result in a lower overall tax liability, especially when one spouse has significant deductions or credits. For example, if one spouse has high medical expenses that exceed the adjusted gross income threshold for claiming deductions, filing separately may allow them to maximize these deductions, potentially leading to a lower tax bill. 

Similarly, if one spouse has significant business losses or other deductions that can only be claimed individually, filing separately can be advantageous. It’s essential to consult with a tax professional to determine if this strategy makes sense for your specific situation. 

Reducing the Impact of the Marriage Penalty 

In the U.S. tax code, the so-called “marriage penalty” refers to the situation where a married couple may pay more in taxes than if they were single and filing individually. This can occur when both spouses have relatively high incomes. In such cases, filing separately can sometimes reduce the overall tax burden. 

It’s important to note that the marriage penalty doesn’t affect all couples, and its impact varies depending on individual circumstances. A tax professional can help you determine if filing separately can help mitigate this penalty for your specific situation. 

Community Property State Laws 

The concept of community property is based on the principle that both spouses contribute equally to the marriage, and as such, they should equally share in the assets and debts acquired during the marriage, regardless of which spouse earned or acquired them. This legal framework is in contrast to equitable distribution states, where assets and debts acquired during the marriage may be divided more flexibly based on various factors, including each spouse’s contribution, financial circumstances, and other relevant considerations. 

The following U.S. states are considered community property states: 

  • Arizona 
  • California 
  • Idaho 
  • Louisiana 
  • Nevada 
  • New Mexico 
  • Texas 
  • Washington 
  • Wisconsin 

If you live in one of these community property states, you must report half of all community income as well as all of your separate income on your tax return. You can use IRS Publication 555, Community Property, to determine these calculations. 

Conclusion 

While filing jointly is often the most straightforward option for married couples, there are certain scenarios where filing separately can be beneficial. Whether you want to protect your individual finances, reduce student loan payments, safeguard your assets, maximize specific tax benefits, or address the marriage penalty, it’s essential to carefully consider your unique financial situation and consult with a tax professional to make an informed decision. 

Ultimately, the decision to file separately or jointly should be based on a thorough analysis of your financial circumstances and long-term goals. By understanding when it makes sense to file separately, you can make the most of your tax situation and ensure financial stability for you and your spouse. Optima Tax Relief is the nation’s leading tax resolution firm with over a decade of experience helping taxpayers with tough tax situations. 

If You Need Tax Help, Contact Us Today for a Free Consultation