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Pre-Wedding Tax Tips to Consider

Planning a wedding can be extremely stressful. Between finding the right dress (or tux) to wear, to picking the right flowers, condensing your guest list to accommodate your venue, choosing the perfect band and making sure your color scheme matches the theme you are aiming for (just to name a few), you still need to plan for what comes after the big day. And I’m not talking about where you plan to honeymoon – that’s the fun part. For instance, where wedding planningdo you want to live? City or Suburban? Do you plan on having any (more) children? If so, how many? Are you taking your partner’s name? Are you hyphenating your name? Keeping your maiden name? These are just a few of the many things you need to consider and plan for when making a lifelong commitment to someone. Here are some tax tips for those of you tying the knot:

  • Change of name. Social Security Administration records must be consistent with all the names and Social Security numbers on your tax return. If you change your name, report it to the SSA. In order to do that, file Form SS-5, Application for a Social Security Card. You can download the form at SSA.gov. You can also call the SSA at 800-772-1213 to order it or get it from your local SSA office.
  • Change tax withholding. The withholding rate for those who are married is lower than for those who are single. Some married people find that they do not have enough tax withheld at the married rate. For instance, this may happen if both you and your spouse are employed. To determine whether or not you should consider a change of income tax withholding, use the IRS Withholding Calculator tool at IRS.gov. Should you come to the conclusion to that you want to change your tax withholding, give your employer a new Form W-4 which can be found at IRS.gov/forms along with any other IRS forms and publications.
  • Change in circumstances. If you receive advance payments of the premium tax credit you should report changes in circumstances, such as your new marital status, to your Health Insurance Marketplace. Other changes that you should report include those in your income or family size. Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes in circumstances will allow the Marketplace to adjust your advance credit payments. This adjustment will help you avoid getting a smaller refund or owing money that you did not expect to owe on your federal tax return.
  • Change of address. If you move, you need to inform the IRS of your new residence. In order to do that, simply file Form 8822, Change of Address, with the Internal Revenue Service. If you haven’t already done so, you should also notify the U.S. Postal Service. You can change your address online at USPS.com or report the change at your local post office. It also goes without saying that you will need to change your address on any identification cards as well (driver’s licenses, passports, etc.)
  • Change in filing status. If you are married as of Dec. 31, for tax purposes, that is your marital status for the entire year. You and your spouse may opt to file your federal tax returns jointly or separately each year. The smartest route to take is to consult with a tax professional (or use tax software at home) and figure the tax both ways so you can choose the status that results in the least tax owed. Additionally, if your earnings or circumstances vary year to year it is also wise to recalculate the numbers and reassess your options each year; depending on your income (and other variables) what worked the previous year may not be the most optimal choice when dealing with different factors any subsequent years.

This – on top of everything else – may seem a bit daunting and why wouldn’t it? You were just thrown a bunch of brand new task list that you (probably) hadn’t even considered. But most of the items on this list don’t actually need to be dealt with until after you’ve said “I Do;” some of the will only take but a few minutes; and a few of them may actually save you and your spouse money! So just relax, take a deep breath and continue planning for the big day. Before you know it your lovable (but loud) but lovable! family will be back at in their hometowns and you and your new husband/wife will be sipping Mai Tais on the beach.

 

Venar Ayar, Esq.

Venar Ayar, Esq.

Attorney-at-Law, Master of Laws in Taxation
Principal and founder, Ayar Law

Venar is an award-winning tax attorney ranked as a Top Lawyer in the field of Tax Law. Mr. Ayar has a Master of Laws in Taxation – the highest degree available in tax, held by only a small number of the country’s attorneys.