If you’re getting married this year, we know you’re probably focused on things like the dress, the venue, the food, etc. As your accounting firm, we want to remind you of some “to dos” you should know considering your taxes and finances.
Here are 5 important things newlyweds should know.
1. If you change your name, be sure to report the name change to the Social Security Administration. Updating your name with the SSA is important because names and Social Security numbers on your tax return must match SSA records.
2. Be aware that if you get married during 2017 you will be considered to be married for the entire year for tax purposes. You and your spouse may choose to file as “married filing a joint return”, or “married filing a separate return” each year. Head of household status is no longer an option if you had previously filed that way because you have children living with you.
3. A change in marital status may, of course, result in a change in your tax bracket. Couples with very dissimilar incomes could end up owing less by getting married, in essence getting a “marriage bonus.” However, couples with similar incomes, may actually end up owing. Changing your withholding status to Married, instead of Single, may actually compound this problem. So, if you work, be sure to complete a new Form W-4, Employee’s Withholding Allowance Certificate, so that your federal and state tax withholdings are adjusted as soon as possible. A tax projection might be helpful in many situations.
4. You should also inform the IRS if your address changes. You can do that by filing Form 8822, Change of Address, with the IRS.
5. Be aware that changes to retirement plan and life insurance beneficiaries may be needed as well when you marry. Generally, retirement plans and life insurance companies can only pay benefits to a participant’s/owner’s named beneficiaries upon his or her death. To change beneficiaries, you should contact your employer or plan administrator and your life insurance company to request change of beneficiary forms and complete them as indicated.
These are just a few things to think about when you come back from your honeymoon. If you have questions about how your new marriage will affect other financial matters, please contact us.