Financial planning can be overwhelming enough when you’re single, but adding another person to the equation can make things a little more hectic. If you’re about to get married or just recently married, here are a few tips from E&Y Tax Preparation Services to help you ease into your taxes with your significant other.
4 Tax Tips For The Recently Married
- Adjust your tax withholding – The first thing you should do when you’re about to join finances together is check on your tax withholding at your job. Newly married couples end up having changes to their tax liabilities, based on their spouse’s salary or income. This could potentially raise or lower, and will adjust your withholding so you’re paying the proper amount of taxes. Does it appear that your tax liability will lighten this year? We suggest increasing your W4 allowances, which will bring in more cash to you each month. If your tax liability will increase, you and your spouse will both see adjustments to your withholding amounts.
- Make itemized deductions – Instead of just taking the standard deductions when it comes to taxes, check into itemized deductions after you’re married. While this does mean a little more effort on your part, it can save you a ton of money at tax time. By keeping up with these itemized deductions throughout the year, you may find it will benefit you to make extra payments or more charitable deductions to improve your tax break with itemized deductions. Stay on top of this throughout the year and come January of next year, you’ll be very pleased with your return!
- Decide if you’re filing together or separate – When you’re married, you have the option to file jointly or separately. Most married couples chose to file jointly, as it comes with more financial breaks, deductions, and credits.
- Consider a Spousal IRA – Just because your significant other may be a stay-at-home parent, doesn’t mean an IRA can’t be contributed to them on your behalf. This benefit is something you can consider once you’re a married couple, and have a filing status of Married Filing Jointly.
Just like planning your commitment when you become a married couple, planning for your financial future also requires some hard work and costly decisions.
For more assistance with your taxes this upcoming year as a married couple, give us a call at E&Y Tax Preparation Services today! (248) 362-1313