June isn't just a time for soaking up the early summer sun; it's the most popular month for couples to get married. About 10.8% of engaged couples will set a date sometime in June, which edges out August for the most wedding-saturated month of the year. Whether you’re having a small or large ceremony, a reception for 20 or 200, you have likely been making plans for months or even years. In the midst of all the excitement, you probably won’t be thinking about your tax filing status. When tax time rolls around next year, here’s the information you’ll need regarding how tax filing status changes for married couples.
In the United States, there are two main filing statuses for married couples: Married Filing Jointly (MFJ) and Married Filing Separately (MFS). The filing status you choose will affect your overall tax liability.
Married Filing Jointly
As you might have expected, Married Filing Jointly (MFJ) is the most common filing status for married couples. When you file jointly, your incomes are combined, and your taxes are calculated as a single unit. This can often result in a lower tax liability than if you filed separately.
There are a few exceptions to the MFJ rule. For example, if you and your spouse live apart, you may be unable to file jointly. Additionally, if you have a large number of itemized deductions, you may be better off filing separately.
Married Filing Separately
Married Filing Separately (MFS) is the less common filing status for married couples. When you file separately, your incomes are not combined, and your taxes are calculated individually. This can often result in a higher tax liability than if you filed jointly.
However, there are a few cases where MFS may be the better option. For instance, if one spouse has a large amount of medical expenses, they might be deducted in full if the couple files separately. If one spouse is subject to the alternative minimum tax (AMT), they may be able to avoid it completely by filing separately. There are other situations in which filing separately could be beneficial, so take the time to discuss your particular circumstances with your CPA or tax professional prior to filing your return.
Additional Things to Know About Taxes After Getting Married
In addition to your filing status, you should be aware of a few other tax considerations including:
- Changing your name: If you're changing your name after you get married, you'll need to update your name with the IRS. When you legally change your name, there are tax consequences. The IRS wants people to report their name change to the Social Security Administration as well; if a name on your tax return doesn't match SSA records, it can delay the IRS processing of your return.
- Claiming dependents: If you have children or other dependents, you can claim them as dependents on your tax return. The rules for claiming dependents are complex, so it's a good idea to talk to a tax professional if you have any questions.
- Taking advantage of tax breaks: A number of tax breaks are potentially available to married couples, depending on your circumstances. These breaks can include the child tax credit, the education tax credit, and the mortgage interest deduction, among others. You should talk to a tax professional to see if you qualify for any of these deductions and credits at tax time.
Which Filing Status Is Right for You?
The best filing status for you and your spouse will depend on your unique circumstances, income, potential deductions, and tax credits. If you need help deciding which filing status to choose, it's always a good idea to talk to a tax professional.
Starting Your Marriage on a Stable Financial Foundation
Getting married can have a significant impact on every aspect of your life, including your taxes. It's essential to understand the tax implications after getting married so that you can make the best choices for your financial situation.
If you have any questions about your tax filing status, please don't hesitate to contact Myrick CPA. We can help you understand your options and determine the best filing status for your circumstances.