If you’re getting married this summer, you and your new spouse need to do some tax planning. A few steps taken now can prevent some nasty surprises when your taxes are prepared next year. Here are some things to keep in mind -
· Change of name. All the names and Social Security numbers on your tax return must match your Social Security Administration records. If you change your name when you marry, report it to the SSA right away. To do that, file Form SS-5, Application for a Social Security Card. The easiest way for you to get the form is to download and print it from www.ssa.gov. You can also call SSA at 800-772-1213 to order the form, or get it from your local SSA office.
· Change tax withholding. When you get married, you should consider a change of income tax withholding for both the IRS and the state you live in. To do that, give your employer a new W4 (and the equivalent state form as well if you federal and state withholding are different). The federal withholding rate for married people is lower than for those who are single but some married people find that they do not have enough tax withheld at the married rate. This often happens when both spouses work. Both the IRS website and most state tax agency websites have worksheets to help you figure out what your new withholding should be. Alternatively, Turner’s Tax Service would be happy to help you figure out your new withholding.
· Change your insurance. If you get your health insurance through your employer, report your marriage to your HR department and complete the paperwork to add your spouse and any new dependents to your insurance. You may have a certain number of days to do this after the wedding, so contact HR right away. If you receive your health insurance through the marketplace (CoveredCA.com, HealthCare.gov, etc) report your marriage as well as any changes in family size or income to the marketplace right away. Reporting changes in circumstances allows 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. Also change the beneficiary on any insurance policies to your new spouse if appropriate.
· Change of address. File a change of address with the U.S. Postal Service if necessary. You can change your address online at www.usps.com, or report the change at your local post office.
· Change in filing status. If you are married on Dec. 31st, that is your marital status for the entire year for tax purposes. You and your spouse can choose to file your tax returns jointly or separately each year. If you live in a community property state such as California, filing separately is usually not advantageous, but it certainly is an option to be discussed with your tax preparer, especially for the year you marry.
Once the celebrations are over and you and your new spouse are ready to do some tax planning, please give Turner’s Tax Service a call at 530-626-8551.