Tax tips for those getting married

Using your tax refund and tips for marriageIf you are newly wed, engaged to be married, or know someone ready for marriage, here are some important tax tips every new bride and groom should know.

Updates you need to make at home

Notify Social Security. Notify the Social Security Administration (SSA) of any name changes by filling out Form SS-5. The IRS matches names with the SSA and may reject your joint tax return if the names don’t match what the SSA has on file.

Address change notification. If either of you are moving, update your address with your employer and the Postal Service. Then, your W-2s will be correctly stated and delivered to you at the end of the year. You must also update the IRS with your new address using Form 8822.

Understand the tax impact of your residence. Additionally, if you sell one or two residences, review how capital gains tax laws apply to your situation. This is especially important if one of you has been in your home for only a short time or if either home has appreciated in value. This should happen as soon as possible, even before the wedding, to maximize your tax benefits.

Updates you need to let your employer know

Review your benefits. Marriage allows you to make mid-year changes to employer benefit plans. Take the time to review health, dental, auto, and home insurance plans and update your coverage. If both of you have employer health plans, you need to decide whether it makes sense for each of you to keep your plans or whether it’s better for one to join the other’s plan as a spouse. Pay special attention to the tax implication of changes in health savings accounts, dependent childcare benefits, and other employer pre-tax benefits.

Update beneficiaries and other legal documents. Review your legal documents to ensure the names and addresses reflect your new marital status, such as bank accounts, credit cards, property titles, insurance policies, and living wills. Even more importantly, review and update beneficiaries on each of your retirement savings accounts and pensions.

Update your withholdings. You must recalculate your payroll withholdings and file new W-4s reflecting your new status. If both of you work, your combined income could put you in a higher tax bracket. This can result in reduced and phased-out benefits.

Need more marriage tax tips?

Sit down with an expert. It is natural for newlyweds to focus their attention on the big day. There are so many decisions to be made, from selecting a venue to planning the honeymoon. Because of this, reviewing your tax situation often is an afterthought. Do not make this mistake. Before the big day, a simple tax and financial planning session can save on future headaches and avoid potentially expensive tax mistakes.

If you’d like to review how marriage will affect your tax and financial situation, contact RRBB Advisors today.


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