Mid-Year Tax Planning For Newlyweds
BOSTON (CBS) - Nobody wants to think about taxes in the middle of summer but it is a good time to put taxes on the radar screen. If your life is complicated you may want to take the time to meet with your tax advisor or financial planner for more help as well.
Those newlyweds we talked about in June are sending out their thank you notes right about now. But there is a bit more paperwork for them. And if you divorced this year, much of this information applies to you also.
The first thing on the list is change of name and address. If you have decided to change your name, make a list of everyone who needs to know your new name and address.
If you chose to use your spouse's last name, the first change of name & address should be the Social Security Administration to update your information. Do the same with your employer and then start the changes on all of your financial accounts, credit cards and legal documents.
Don't forget the beneficiary designations on your retirement accounts and life insurance policies. You'll want to protect your new spouse if something should happen to you.
Your marital status on December 31 determines whether you are considered married for that year. Married persons may file their federal income tax return either jointly or separately in any given year.
Figuring the tax both ways can determine which filing status will result in the lowest tax – usually, it's filing jointly. IRS Publication 501, Exemptions, Standard Deduction, and Filing Information, has detailed information on filing status.
Your combined incomes may place you in a higher tax bracket. You can use the IRS Withholding Calculator to help you figure out the correct amount of withholding needed for your new filing status. And you can print out new W-4s to give to your employers.
