Summer is a popular time for weddings. But no matter when you say “I do,” marriage typically leads to many changes — not only on a personal level but also in your finances. Here are some tax issues and other financial considerations to keep in mind if you or someone you know is making the transition to married life.
Name and address changes. The names and Social Security numbers on your tax return must match Social Security Administration (SSA) records, so report any name change by filing Form SS-5, Application for a Social Security Card. You can download the form on ssa.gov. Notify the IRS of an address change by filing IRS Form 8822. You may also report the change at your local post office.
Beneficiary forms. Update beneficiary forms for life insurance, retirement accounts, and other financial accounts as soon as possible. For some accounts, your current spouse is automatically the beneficiary, but you should still change your forms. (You may have to make specific provisions for any children from a previous marriage.)
Filing status. If you are married as of December 31, you are considered to be married for the whole year for tax purposes. You and your spouse can choose to file your federal income tax returns either jointly or separately each year, so you may want to calculate both ways to determine which one results in the lower tax liability.
Tax withholding. You must give your employer a new W-4 form to change your withholding. You and your spouse’s combined income could move you into a higher tax bracket, but it’s also possible that filing jointly will reduce your tax liability. You may want to use the IRS withholding calculator at irs.gov/Individuals/IRS-Withholding-Calculator. If you are self-employed, recalculate your estimated tax payments.
Affordable Care Act (ACA) issues. If you bought insurance from the Health Insurance Marketplace and received an advance payment of the premium tax credit, report any changes in income or family size to your marketplace. You should also notify the marketplace if you move out of the area covered by your plan.
Marriage is the beginning of a new life on many levels. Taking care of financial details should be the easy part!
The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. Copyright 2015 Emerald Connect, LLC.