The trio of love, marriage, and taxes sounds like an unlikely pairing. However, nuptials often have a big impact on individual income taxes.
Let's start with the question most often asked, "Do we file together?"
If two are legally married on December 31, 2011, then generally two options exist for filing status (this blog will not explore a loophole for Head of Household)- Married Filing Joint or Married Filing Separate. The tax code includes several hindrances for those who are married but wish to file separately. However, these hindrances do not apply to all couples.
The forgotten question, "Do we need to adjust our withholdings?"
When couples marry, tax refunds either disappear or become much larger. So many factors come into play when you combine income. That double-income factor alone may take you to a higher tax bracket. But other factors like dependents or the purchase of a home may alleviate some tax burden. To be certain that you are not surprised next tax season, visit a tax professional and discuss how you may consider adjusting your W-4s.
"Am I liable for my spouse's past debts?"
When you file and sign a tax return together, both parties are accepting what is being reported to the IRS as truth. If your spouse holds debt prior to your marriage with which you are not liable and it is the type of debt that may have a refund withheld (usually IRS debt, back child support, delinquent student loans, or delinquency on other federally secured loans) then consider fling Injured Spouse. Injured Spouse will not protect 100% of the refund amount, but will protect some to most of the refund depending upon different factors.
Picking your wedding decor, china patterns and the like can all be very complicated decisions! The tax implications of your marriage can be even more complex. Hopefully some of these tips make tax time simpler for you this year!
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.