Tax Tips for Marriage Status Changes

The IRS generally considers whether you’re married, separated but not legally separated, or divorced at the end of the year. Marriage status is important in filing taxes; it not only determines filing requirements but also standard deductions, eligibility for certain credits and taxes as well. In fact, you may have to deal with multiple government agencies if you change your status.

You may want to peruse IRS Publication 504, Divorced or Separated Individuals, which gives exact qualifications and exceptions on filing statuses. If you changed your marital status this year, here are some points to consider:

• How and where to report a name change: Notify the Social Security Administration. The name on your tax return must match what’s on file at the SSA. If the name doesn’t match, it can delay any tax refund. To update your information, go to the SSA’s website and search “Change Name with Social Security.” You also can have your name change processed by calling the SSA at 800-772-1213 or by visiting a local SSA office.
• How to update your address: Notify the U.S. Postal Service, your employer and the IRS of an address change. A key form is Form 8822, Change of Address (For Individual, Gift, Estate, or Generation-Skipping Transfer Tax Returns).
• Paycheck withholding: A change in marital status may also affect how much tax should be withheld from your paycheck. To avoid a surprise at tax time, you should use the IRS Tax Withholding Estimator to calculate your withholding. You should also speak with a tax professional to properly understand your new tax situation. You will likely have to fill out a new Form W-4, Employee’s Withholding Certificate, to give to your employer.

Newlyweds: Consider your situation

If you are newly married, you’ll want to review your filing status. You can choose to file your federal income taxes jointly or separately each year. It’s a good idea to figure the taxes both ways to see which makes the most sense. Even if you were married on Dec. 31, the law says you’ve been married for the whole year for tax purposes.

Again, this can get complicated. Are you or your new spouse selling a home to move in together? Are stepchildren involved? Don’t wait until you get an unpleasant tax bill surprise; work today with a qualified professional.