New marriages often bring name changes and address changes -- but they're certain to bring big changes to your taxes, too. Newlyweds should start out their lives together by talking about money, but instead, many couples avoid the subject and end up fighting about it.
One area of stress you don't need while you're fresh from paying for the wedding? Tax problems. And even Uncle Sam knows it. With a big hat tip to the folks at IRS.gov, here are eight tax tips for newlyweds:
8 Tax Tips for Newlyweds
8 New Things Newlyweds Need to Know About Their Taxes
Know that no matter when you got married, the Internal Revenue Service considers you married for the entire year.
If you changed your name when you married, inform the Social Security Administration. Not doing so can foul up your tax return, if your name and Social Security number don't match on all your records, and it can also result in your earnings and other data not being properly credited.
Be sure that the Social Security Administration, the IRS, and your employers know your new whereabouts, so that you receive important mailings -- and perhaps your tax refund, too. Submit Form 8822 to the IRS to change your address in its records.
Revisit your withholding to make sure it's optimized. The IRS offers a withholding calculator. If changes need to be made, submit a revised W-4 form to your employer. You can be strategic about it, too. For example, if you're self-employed and your spouse collects a salary, you could increase your spouse's withholding to cover some of the tax obligation generated by your self-employed income. Doing so may help you avoid paying quarterly estimated taxes.
A key decision for new couples is whether to file their tax returns jointly or separately. Run through both scenarios to see which results in a lower overall tax bill. In most cases, filing jointly is best: It will save time, as there's just one return to prepare, and you won't have to decide who gets to take which deduction. If you don't want to share responsibility for your spouse's tax obligations or if you both simply prefer to keep your finances separate, you might opt to file separately.
You may not have itemized your deductions before, as the standard deduction probably made more sense. But with your financial life now combined with that of someone else, itemizing deductions might reduce your tax bill.
You may need to change your retirement vehicles. Before you were married, you might have saved regularly via a Roth IRA, but being part of a couple with a high joint income could exclude you from eligibility for that now.
If one of you sold a home in order to combine households, look into the home sale exclusion, which, if you qualify, lets you exclude up to $250,000 of capital gains on the sale from taxation ($500,000 for couples).