How a Summer Wedding Can Affect Your Taxes
Being aware of the tax issues that come with marriage.
By Canita Gunter Peterson // Photo Courtesy of ResortQuest
Getting married this summer? With all the preparation that goes into a wedding, taxes may not be high on your summer wedding checklist. However, you should be aware of the tax issues that come along with marriage. Here are some basic tips to help with your planning:
1) Name Change
The names and Social Security numbers on your tax return must match your Social Security Administration (SSA) records. If you change your name, report it to the SSA.
2) Change Tax Withholding
A change in your marital status means you must give your employer a new Form W-4, Employee’s Withholding Allowance Certificate. If you and your spouse both work, your combined income may move you into a higher tax bracket, or you may be affected by the Additional Medicare Tax.
3) Changes in Circumstances
If you or your spouse purchased a Health Insurance Marketplace plan and receive advance payments of the premium tax credit in 2016, it is important that you report changes in circumstances, such as changes in your income or family size, to your Health Insurance Marketplace when they happen.
You should also notify the Marketplace when you move out of the area covered by your current Marketplace plan. Advance credit payments are paid directly to your insurance company on your behalf to lower the out-of-pocket cost you pay for your health insurance premiums.
Reporting changes now will help you get the proper type and amount of financial assistance, so you can avoid getting too much or too little in advance, which may affect your refund or balance due when you file your tax return.
4) Address Change
Let the IRS know if your address changes.
You should also notify the U.S. Postal Service. You can ask them online at USPS.com to forward your mail. You may also report the change at your local post office.
You should also notify your Health Insurance Marketplace when you move out of the area covered by your current health care plan.
5) Tax Filing Status
As long as you are married as of Dec. 31, that is your marital status for the entire year for tax purposes. You and your spouse can choose to file your federal income tax return either jointly or separately each year.
You may want to figure the tax both ways to find out which status results in the lowest tax.
6) Select the Right Tax Form
Choosing the right income tax form can help save money. Newly married taxpayers may find that they now have enough deductions to itemize on their tax returns.
You must claim itemized deductions on Form 1040, not Form 1040A or Form 1040EZ.
If you have any questions about how summer weddings can affect your taxes, consult a certified public accountant at Thomas Howell Ferguson P.A.