It’s that time of the year when many people walk down the aisle and vow to be together till “death do us part”. Both Don and Jan are excited about the upcoming event of their lives! While wedding bells ring in happiness and bliss, it also ushers tax worries among other concerns. Summertime is the most traditional time of year for weddings. They paid a visit to their tax professional and were instructed on what to do next.
Although we usually associate marriage with Love, Roses and Cake: If you’re walking down the aisle here is a checklist of TAX matters to consider:
This can be done either online or in person. The Social Security Administration is better staffed, and much faster than ever before. If you go in person, you will probably be out very quickly. We dread going to any government office, but this one is on our side.
Each company or government agency you do business with needs to know your new address in writing to be effective. A phone call does not guarantee the update will occur. Be sure to ALWAYS send such mail certified, so it can be tracked and proven that you notified them.
No matter what day you are married or divorced, your status as of December 31, each year is your tax status. Once you are either married or divorced be sure to calculate the impact of any marriage penalty to see whether you need to change your income tax withholdings with your W4. (Remember if you divorce, you lose at least one tax benefit, maybe more if your former spouse takes the children; and this will cost you more taxes at year end.)
The IRS reminds newlyweds to add a health insurance review to their to-do list. This is particularly important if you receive premium assistance through advance payments of the premium tax credit via a Health Insurance Provider or Marketplace. If you, your spouse or a dependent gets health insurance coverage through the Marketplace, you need to let the Marketplace know you got married. Informing the Marketplace about changes in circumstances, such as marriage or divorce, allows the Provider or Marketplace to help make sure you have the right coverage for you and your family and adjust the amount of advance credit payments that the government sends to your health insurer. Reporting the changes will help you avoid having too much or not enough premium assistance paid to reduce your monthly health insurance premiums. Getting too much premium assistance means you may owe additional money or get a smaller refund when you file your taxes. Getting too little could mean missing out on monthly premium assistance that you deserve. You should also check whether getting married affects your, your spouse’s, or your dependents’ eligibility for coverage through your employer or your spouse’s employer, because that will affect your eligibility for the premium tax credit.
Other changes in circumstances that you should report to the Health Provider or Marketplace include:
In addition, certain life events – like marriage – give you and your spouse the opportunity to sign up for health care during a special enrollment period. That means if one or both of you is uninsured, you may be able to get coverage now. In most cases, the special enrollment period for Marketplace coverage is open for 60 days from the date of the life event.
IRA’s, insurance policies and 401k’s all need to be reviewed and/or updated to reflect who the new beneficiary will be, now that your spouse is no longer the primary beneficiary in case something happens to you.
Did you know that once you are married, your individual credit file and your credit score remain yours alone? Newly married couples may finance a home, a car and other household items as a unit. This fact can confuse the issue, as it lends people to think that they now have a joint credit file and joint credit score. That is not the case. When you apply for credit as co-applicants, both credit files are pulled and considered by the lender. Given that a couple’s personal credit is dictated by two individual credit files, it is important to order free credit reports for both yourself and your spouse, and to provide identity protection for both.
Be sure to consult with a tax professional before you marry. There may be tax issues from a former life or marriage that can haunt you in the new marriage. But there are also ways to make sure that the new marriage is NOT haunted from problems of the past. (Consider filing an Injured Spouse Form 8379).
If you are legally married in a state or country that recognizes same-sex marriage, you generally must file as married on your federal tax return. This is true even if you and your spouse later live in a state or country that does not recognize same-sex marriage. Be sure you know the rules for the state you live in. It may be the same or different from the Federal tax rules on how to report your taxes.
Call today, don’t delay! See how this affects you. We can be reached at 602-264-9331 and on all social media under azmoneyguy.
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