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Newlyweds, Don't Let the IRS Spoil Your Honeymoon

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MarriageGetting married should be one of the happiest events of your life. But even if everything goes perfectly on your special day, the IRS may spoil the party -- or give you a late and unwelcome wedding present.

That's because getting hitched means big changes on your taxes, not the least of which is having to decide whether you and your new spouse want to file jointly or separately, which can have a big impact on the tax rates you'll pay as well as which deductions and credits you're entitled to.

First of all, the IRS looks at your marital status on the last day of the year. So whether you got hitched right after the ball dropped on Jan. 1, 2011, or you waited until New Year's Eve to tie the knot, you'll need to file as married.

As you start gathering tax forms and combine your finances for the first time, here are some things to consider:
  • The infamous "marriage penalty" hits many couples, but definitely not all of them. You're most likely to face a marriage penalty if both spouses work and earn similar pay. Single-earner families, on the other hand, often see a tax benefit from marriage.
  • Most married couples should change the way they have taxes withheld from their paychecks. By filing a new Form W-4 with your employer, you can adjust your withholding to make sure you don't have too little (or too much) tax withheld.
  • Usually, filing jointly makes the most sense, as filing separately makes you ineligible for certain valuable tax credits, including those for child care and education as well as the Earned Income Tax Credit. But occasionally -- such as when one spouse has major medical expenses -- filing separately can save you money.
  • Make sure the IRS has up-to-date information about you. If you've moved into a new home, Form 8822 informs the IRS of your new address. For name changes, you'll want to fill out Form SS-5 to keep both the Social Security Administration and the IRS up to speed on your new name.
Finally, marriage may give you extra savings opportunities. For instance, most people who don't work can't open IRAs, but a nonworking spouse can open a spousal IRA. Doing so is a great way to help you prepare for your long-term retirement goals.

So if you've recently married, congratulations! With these tips, hopefully the IRS will give its blessing to your union as well.





More on taxes:

Motley Fool contributor Dan Caplinger would like to thank his spouse for bringing him lots of tax benefits. You can follow him on Twitter here.

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moo0o0o0o0oo

stupid me, I thought this actually had to do with taxes related to traveling (e.g. a honeymoon)

February 13 2012 at 4:52 PM Report abuse rate up rate down Reply
Cassandra Enslin

My fiancé and I are both fortunate to have pretty successful careers with more than six figure salaries. We already pay a lot in taxes but let me tell you, the day we get hitched we can add an extra $10K to our tax bill for 2012 and probably another $10K each year for the rest of our blissful, married lives. Our income stays the same but Uncle Sam gets a bigger slice of the pie. I’m still trying to figure out why I’m being penalized on the tax front for working my tail off to try and keep my career going instead of staying at home with the kiddos. If it weren’t for the $50K in unconsolidated student loans that I’m still paying off I’d gladly trade my full-time job for play groups, Sesame Street and homework help. We don’t mind paying more in taxes (in both absolute dollars and %) than people that make less than us but this marriage tax penalty is nonsense. And seriously, marriage is hard work; maybe the IRS should consider a tax credit based on the number of years you’ve stayed hitched! I find myself looking at my tax projection and thinking, should I ask my boss for a pay cut?

February 13 2012 at 4:12 PM Report abuse rate up rate down Reply
rini1946

There should get rid of the married filling seperate and give them a choiceof single or married. The only time it makes a difference is when you make over 70 grand apiece single here are some numbers people making 69,000 to 69,050 pay single 13,381 married jointly 9,506 married filling seperate 13,381 and head of household12,024. So there is no big change in the dollars if they both are working then they should pay the taxes a single person has to. Remember they have one house payment 1 util payment . Where two single people have 2 house payment and two util payment. It makes no sense that a married people should get a tax break if they are both working .

February 13 2012 at 8:59 AM Report abuse rate up rate down Reply
rockstar

you don't need a honeymoon to have the IRS spoil your plans.

February 11 2012 at 1:28 PM Report abuse +1 rate up rate down Reply
saksr1of3

I'll tell you what Mr. government. You need to stop supporting the IRS that keeps we the 99%er's a slave to the man made money matrix! Government needs to step up to the plate or get out of office because your not on the side of we the people if you support human slavery in this manor.

February 11 2012 at 9:56 AM Report abuse +2 rate up rate down Reply