If you’re “tying the knot” this summer, you should review a few tax-related items after the wedding. Big life changes, including a change in marital status, often have tax implications. Here are a few things couples should think about after the wedding.
Name and address changes
People who change their name after marriage should report it to the Social Security Administration as soon as possible. The name on your tax return must match what is on file at the SSA. If it doesn’t, it could delay your tax refund. To update your information, file Form SS-5, Application for a Social Security Card. The form is available on SSA.gov, by calling 800-772-1213 or at a local Social Security Administration office.
If marriage means a change of address for you, the IRS and U.S. Postal Service need to know. To do that, send the IRS Form 8822, Change of Address. You should also notify the postal service to forward your mail by going online at USPS.com or by visiting your local post office.
After getting married, couples should consider changing their withholding. Newly married couples must give their employers a new Form W-4, Employee’s Withholding Allowance within 10 days. If both spouses work, they may move into a higher tax bracket or be affected by the additional Medicare tax.
Married people can choose to file their federal income taxes jointly or separately each year. For most couples, filing jointly makes the most sense, but you should review your own situation to decide what is best for you. If a couple is married as of December 31, the law says they’re married for the whole year for tax purposes.
As every parent knows, kids are expensive. If you are the parent or caregiver of a child, there are some tax breaks that can help make those expenses a little less painful.
First things first…
If you are a new parent, there are a few things you will want to do before exploring any tax breaks that you may be eligible for. These steps will help make sure you are eligible for tax deductions and credits related to your child, and can help avoid unhappy surprises come next tax season.
- Get a Social Security or Individual Tax Identification number for your child. In order to claim parental tax breaks, you must have your child or dependent’s Social Security number, Adoption Tax Identification Number, or Individual Tax Identification number. Confirming a child’s birth is the only way the IRS can verify that your are eligible for the credits and deductions you claim on your tax return.
- Check your withholding. A new family member might make you eligible for new credits and deductions, which can greatly change your tax liability. If you need to adjust your withholding due to these changes, provide your employer with an updated Form W-4, Employee’s Withholding Certificate, to change how much tax is withheld from your paycheck.
Check eligibility for tax credits and deductions
- Child Tax Credit. If you claim at least one child as your dependent on your tax return, you may be eligible for the Child Tax Credit, which may take thousands of dollars off your tax bill.
- Child and Dependent Care Credit. If you paid someone to take care of your children or another member of your household while your worked, your may qualify for the Child and Dependent Care Credit regardless of your income. For example, you may be eligible to claim up to 35% of your daycare expenses with certain limits.
- Adoption Tax Credit. This credit lets families who are in the adoption process during the tax year claim eligible adoption expenses for each eligible child. You can apply the credit to international, domestic, private and public foster care adoptions.
- Earned Income Tax Credit. The Earned Income Tax Credit helps low- to moderate-income families get a tax break. If you qualify, you can use the credit to reduce the taxes you owe – and maybe increase your tax refund.