Filing your income tax return with the Internal Revenue Agency (IRS) can be quite the hassle, and for newlyweds especially, there is a lot to consider—from deciding what needs to be changed (like your name, address, and filing status) to deciding whether to report your income together or separate.
In this blog post, we help you prepare for this year’s tax deadline by answering some common questions you and your new husband or wife may have about filing your taxes as a married couple.
Related document: Personal Financial Statement
Does getting married affect your taxes?
Yes, getting married affects your taxes in both minor and major ways: from the information you include in your return (like your name and address), to your filing status, to what benefits apply to you, and more.
Before filing taxes, you’ll need to make sure your information is correct and up-to-date. This is crucial for anyone who took their spouse’s last name or moved to a new house or apartment after tying the knot.
Make sure to update:
- Your name and address with Social Security Administration records (as the information on your income tax return needs to match the information on your social security card)
- Your name and address with your employer (so that your W-2’s are correct when they’re provided to you at the end of the year)
- Your address with the IRS by submitting a change of address form
- Your address with the U.S. Postal Service
After you update your information, you need to decide whether you and your husband or wife should file your taxes together or separately.
Should married people file their taxes jointly or separately?
After getting married, a couple can file their taxes as “married filing jointly” (meaning one income is reported for two people) or as “married filing separately” (meaning two incomes are reported for two people).
For most couples, filing jointly is better than filing separately, but it may depend on your situation.
The reason filing together is typically better is that your taxes are determined using a different set of tax brackets. Because the ranges in this tax bracket are higher, you often pay fewer taxes.
Keep in mind, filing taxes together means owing taxes together. In other words, if you or your spouse pays taxes in April, instead of with each paycheck, both of you will owe taxes when they’re due and be penalized if they’re paid late or not at all.
Another downfall with filing together is that you are on the hook for errors made by your spouse. So, if your wife or husband underreported their income (like saying they made $100,000 a year when it was actually closer to $150,000), you will suffer the consequences (like audits and penalties) together.
What are some tax benefits to filing as a married couple?
There are plenty of benefits to filing taxes as a married couple. For instance:
- Your incomes are taxed at a different rate, one that is often better than filing as a single person and typically results in you having to pay back less in taxes at the end of the year.
- You’re able to use a higher standard deduction amount (a chunk of your income that is not subject to tax).
- You have a higher amount for expense deductions (for example, the amount you can deduct for charitable contributions).
- You’re eligible for more tax exemptions.
- You can still contribute to an individual retirement account (IRA) even if you’re unemployed.
- You can give monetary gifts to your spouse without any tax consequences.
Do we have to be married for a full year before we can file together?
It’s a common misconception that newlyweds cannot file their taxes together until they’ve been married for a full year.
Thankfully, this is false and even couples who married on December 31 of that tax year can file their taxes (together or separately) as a married couple.
Can my common-law spouse and I file our taxes as married?
Typically, a couple is considered to be in a common-law marriage if they have been living together and sharing assets for a certain amount of time, even if they haven’t officially been married by a legal officiant.
In some states (like Texas or Alabama), common-law marriages are considered legal marriages, which means the couple can file their taxes as a married couple, together or separately.
However, keep in mind that many states do not recognize common-law marriages, so be sure to check your state’s laws. If your state does not recognize common-law marriages as a legal marriage, then you need to file individually and as a single person.
That said, a couple who is not legally married may be able to use the Head of Household status on one of their returns (not both). This tells the IRS that one person is paying most of the expenses related to maintaining the home.
Filing as the head of your household may not be the same as filing as a married couple, but there are some benefits. For instance, typically the tax rate is lower and the standard deduction is higher for people who file as Head of Household.
It can be challenging to determine who should use the Head of Household filing status, especially when your accounts are combined and expenses are, for the most part, shared. However, those struggling to choose who should use this status may find it helpful to outline their income and expenses using a Personal Financial Statement.
Preparing for Tax Day
As your honeymoon comes to an end and tax season quickly approaches, it’s time to think about tax forms, filing statuses, deductions, and more.
Understanding how taxes work for married couples, specifically how marriage affects your taxes, what tax benefits are available to spouses, and if you and your husband or wife should file together or alone, will help you the first time you file as a married couple.