Greetings -
Typically when you come to my blog you see great topics on gettting married! Today we are headed in another direction! What to do once you are married!!!!!!!!!!!! I love staying in contact with brides long after the wedding day has passed. I love seeing pictures of their first home, their new puppy and get super excited when I hear a new baby or babies are on the way! CONGRATULATIONS to Heather and Stephen who were married Sept 28th 2008 - she just emailed me from their home in Hong Kong to say they are pregnant with twins! (But I digress!!) Today I want to share with you some great advice from Sandy Johns - Owner of Revolution Accounting Solutions about how to prepare for those taxes now that you are
Mr. and Mrs.
In business terms, marriage is usually a merger! It often involves merging not only your families and facilities but also your finances. Tax implications are an important consideration in this “merger”. Here are some essential “to-do’s” as you and your honey merge lives through the wonderful adventure of wedded bliss.
Change Your Address – If either spouse has a change of address, be sure to notify the IRS so you receive forms, refunds, and other important communications in a timely fashion. To report a change of address, you’ll need to file Form 8822 which may be accessed from www.irs.gov or by calling 1-800-TAX-FORM.
Change Your Social Security Card – For spouses who have a name change (including a hyphenation), it’s essential to change your name as registered with the federal government. Otherwise, a tax return filed with your new married name will not match the name in the system for your social security number , resulting in a delay of any refund you are due – not to mention the hassle you’ll endure trying to get things sorted out. To receive an updated SS card with your name change, you’ll need to file Form SS-5 which may be accessed from www.socialsecurity.gov/ssnumber .
Notify Your Employer – You may change your withholding status from single to married by updating your W-4 form with your employer. (See your employer’s Human Resources Manager.) Note that you may choose to have your withholding remain the same by checking the box for “Married but Withhold at Higher Single Rate”. Some people choose to do so in order to maximize their tax refund each year.
Decide How To File – Separately or Jointly? – Generally speaking, most couples pay less tax if they file jointly. However, this isn’t always the best “default” option for newlyweds. There are some important things to consider. Are you a “saver” and your spouse is a “spender” or vice versa? Does one spouse earn significantly more than the other? Are you comfortable with the way your spouse manages his/her personal finances and reports income and deductions? If you elect to file your taxes as Married Filing Jointly, each spouse is liable for the taxes and the information filed. So, if you don’t want to be responsible for your spouse’s tax liability or the way he/she reported their information, you may elect Married Filing Separately. In this case, each spouse is only responsible for their individual return. It’s important to note, however, that if one spouse itemizes deductions, the other spouse must also itemize if Married Filing Separately.
Be Organized – In order to benefit from the tax deductions available to you, it’s crucial to maintain a system of receipts for mortgage interest paid, charitable contributions made, medical expenses incurred, etc. When in doubt about whether an expense is deductible, save the proof of payment. Many people simply use a large manila envelope to stuff receipts in on a regular basis. You don’t necessarily have to know why or how to use the information, just save it! And that leads us to the next tip…
Get Professional Help – No, we’re not talking about marital counseling… Hire a tax professional! Many newlyweds are not aware of the tax implications of merging finances. Develop a relationship with a trusted tax advisor who will prepare your returns and ask the right questions so as to maximize potential refunds and minimize future tax liability. Your tax professional can also, upon request, prepare your return two ways (jointly and separately) to see which method provides the lowest amount of tax liability.
Revolution Accounting Solutions provides tax planning and preparation services to individuals and small businesses. Now through April 15th, 2009 mention “A Magical Affair” and receive a 15% discount on tax preparation and filing. Call 615.238.4121 or visit www.revolutionaccounting.net for more information.
Wishing you a Magical Day ~
Courtney
