Taxes are Part of Getting Married

Taxes are not romantic, even to me. However, taxes are part of getting married. A conversation about income taxes should be part of every engaged couples’ wedding plans. Marriage, like many other life events, impacts how a person’s income taxes are filed. 

Before marriage, taxes are usually filed under the “single” filing status. After those wedding bells chime and the “I Dos” are said, each spouse’s income tax filing status changes to “married.” Engaged couples who are newly married, or about to get married, should be aware of these four points before filing their next income tax return:

  • Taxpayers are required to file income tax returns based on their marital status on December 31st, the last day of the tax year. Couples who get married on New Year’s Eve are considered married for the entire year for tax purposes.
  • Married couples can select the “married filing jointly” (MFJ) or “married filing separately” (MFS) filing status, depending on which option means a lower tax bill. Couples can assess their tax situation annually to select the filing status that results in the lower overall tax liability.
  • Filing MFJ or MFS is a choice. However, it’s important to be aware that different tax rules apply for couples selecting the MFS option. Examples include rules related to itemized deductions, the standard deduction, the capital loss limit, and some refundable and non-refundable tax credits.
  • To plan for filing next year’s income tax return, couples can refer to information from their prior-year tax returns to help determine whether using the MFJ or MFS filing status might result in a lower overall tax liability. Hint – MFJ often results in a lower overall income tax bill.

Newly-married couples can reduce tax stress by learning about how the filing status rules apply to them before filing their next income tax return. Want to know more? Check out the IRS’ webpage with the details about income tax filing status and links to more information https://www.irs.gov/newsroom/correct-filing-status

Taxes aren’t romantic, but they are part of getting married. And the IRS has the perfect wedding gift, a helpful checklist for newly married couples – https://www.irs.gov/newsroom/a-tax-checklist-for-newly-married-couples. No thank you note required.

Marriage and Taxes

Fall weddings are a lot more popular than they used to be. This time of year, friends, family, and colleagues are gathering to celebrate couples joining their lives in matrimony. Newlyweds have so much planning to do – a wedding, a honeymoon, where to live. It’s not very romantic, but married couples also need to plan for income tax changes after the wedding celebrations are over.

Many life events, including marriage, impact how income taxes are filed. Before marriage, taxes are filed under the “single” filing status. After marriage, the filing status changes to either married filing separately (MFS) or married filing jointly (MFJ), whichever results in the lower overall tax liability.

Couples who are newly married, or about to get married, should be aware of these five points before filing their next income tax return:

 

  • Taxpayers are required to file their income tax returns based on their marital status on December 31st, the last day of the tax year. Couples married on New Year’s Eve are considered married for the entire tax year.

 

  • Married couples can select the MFJ or MFS filing status, depending on which option results in a lower overall tax liability. Couples can assess their tax situation annually and select the lower filing status each year.

 

  • Tax rules apply differently to couples selecting the MFS option, such as the standard deduction, the capital loss limit, and some refundable and non-refundable tax credits.

 

  • Pass-through business owners with more than $315,000 of income using the MFJ filing status should consider whether the MFS filing status would result in a higher qualified business income deduction.

 

  • Couples can assess whether using the MFJ or MFS by filing status is more beneficial by referring to their prior year tax returns as a guide and referring to the IRS and state tax department websites.

 

Want to know more? Check out the IRS’ webpage about filing status https://www.irs.gov/newsroom/correct-filing-status and your state tax department site, or consult a qualified tax professional. That person can help clarify all of the information for you.