Major life changes can mean new tax issues

The IRS is advising people that whether they have been married or divorced in the past year, there are certain tax implications to take into account at filing time.

According to the agency's Web site, newlyweds who took their spouses last names and file returns with that new name may find that IRS computers are not always able to match it with their Social Security number. This is also said to be the case with people who hyphenate their names.

Those who have recently been divorced and change back to their former name could also run into issues at tax filing time. With that in mind, to avoid either scenario, people must contact the Social Security Administration to inform them of the name change.

The IRS notes that a form SS-5 will be needed, from either a local office or online, to inform the SSA of a name change, and that the process typically takes about two weeks.

The agency goes on to point out that people who adopt a spouse's children after getting married will also want to provide a Social Security number on their tax forms for all such dependents, and that they themselves may need to apply for an Adoption Taxpayer Identification Number.

With many major life changes carrying various implications under the tax code, consulting with a professional tax preparer is always advisable.

Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.
Posted To: Tax Ranger's Blog By: Tax Ranger On: Saturday, February 06, 2010
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