In addition to learning to live together and combining their lifestyles, newly married couples also have a lot to learn when it comes to filing taxes. Getting a head start on the learning the following newlywed tax mistakes can easily translate to tax savings and less stress.
Filing as Single
Whether it is out of the force of habit or genuine confusion, a number taxpayers attempt to file as “single” after getting married. Doing so is a surefire way to attract unnecessary attention from the IRS. Married people may file as “married filing separately” or “married filing jointly”. “Single” is no longer an option, though it may result in a larger return.
Not Discussing How to File
Marriage requires communication. One of the first topics that should be discussed in a new marriage is which of the two filing statuses the spouses will use. While the decision may seem straightforward, thorough discussion may include debts and tax liens that may make one filing option much more favorable than the other. Because the spouses are both liable for each other’s actions when filing jointly, people who are concerned about issues like falsified tax documents are likely better off filing separately until the issue is resolved. Filing jointly also has benefits, including the Earned Income Tax Credit, student loan interest deductions, the American Opportunity Credit and other college and education-related deductions, and the child tax credit.
Late Name Change
Although many taxpayers regard the legal name change as a tedious task, the process should be completed sooner than later. Individuals should change their name early enough to allow the Social Security Administration ample time to notify the IRS. The IRS will need to be aware of the name change in order to permit the person to file.
Failure to Amend Past Returns
Same-sex couples who were legally married before 2013 may be eligible for a refund if they opt to refile as married. If a refund is due, the individuals would need to refile their relevant past tax returns.
The best way to avoid newlywed tax mistakes is to work with a tax professional to ensure compliance with IRS rules and to help capitalize on available tax savings. As a CPA with over 18 years of experience, Gary Kaplan is available to assist taxpayers with a broad assortment of tax and accounting situations. Taxpayers in Florida, Maryland, New York, Washington, D.C., and Utah are encouraged to give Mr. Kaplan a call to discuss their unique tax situation.
