Getting married is a big decision, and it’s not just about the two people who are tying the knot. It also affects your tax bill! In this post, we will discuss 5 ways that marriage can affect your taxes. Keep in mind that every couple is different, so you may not be affected by all of these changes. But it’s important to know what to expect when you file your taxes as a married couple. Let’s get started!
Ways Getting Married Affects Your Tax Bill
Though love may be all you need, it doesn’t come tax-free. In addition to the other significant changes that come with getting married, your tax situation will also be affected. Here are five ways that tying the knot can impact your taxes:
#1 Your Filing Status Will Change
- One of the many changes that come with getting married is a change in your tax filing status. If you are unmarried, you will likely file as a single taxpayer. However, once you are married, you will need to decide whether to file jointly or separately.
- There are several factors to consider when making this decision, including your income, your spouse’s income, and any deductions or credits you may be eligible for. In general, married couples who file jointly tend to owe less in taxes than those who file separately.
- However, there are some situations in which it may be beneficial to file separately. For instance, if one spouse has a significantly higher income than the other, they may be in a lower tax bracket. Hence, it is important to consult with a tax professional before making any decisions about your filing status.
#2 You May Be Eligible For New Deductions And Credits
- Marriage can have a significant impact on your tax bill. If you’re married, you may be eligible for new deductions and credits that can save you money come tax time. You’ll also want to be sure to update your filing status so that you’re correctly claiming the deductions and credits to which you’re entitled.
- Getting married can also have an impact on your tax bracket. By combining your incomes, you may find yourself in a higher tax bracket than you were as a single filer. That means you’ll pay a higher tax rate on any income above the thresholds for your new bracket.
- But, there are also some key benefits to being married when it comes to taxes. For instance, you can take advantage of the marriage bonus: if one spouse earns significantly more than the other, they may be able to drop down into a lower tax bracket, resulting in a reduced tax bill. There’s no one-size-fits-all answer when it comes to marriage and taxes.
#3 You May Need To Adjust Your Withholding
- One of the financial aspects that you need to consider when you get married is how it will affect your tax bill. If you are used to filing taxes as a single person, you may need to adjust your withholdings once you are married.
- This is because your tax bracket will likely change and you may end up owing money if you don’t adjust your withholdings accordingly. Additionally, if you and your spouse have different incomes, it may be beneficial to file separately to lower your overall tax burden.
- However, this is something that you should discuss with a tax professional to determine what is best for your specific situation. Ultimately, getting married can have a significant impact on your taxes, so it is important to be prepared for the possible changes.
#4 You May Need To Pay Estimated Taxes
- Getting married will affect your tax bill because you may need to pay estimated taxes. When you are married and file a joint return, you and your spouse will be jointly and severally liable for the tax on your combined income.
- This means that if one spouse does not pay the tax, the other spouse may be held responsible. As a result, it is important to ensure that both spouses are prepared to pay the tax owed on their combined income. One way to do this is to file estimated taxes.
- Estimated taxes are quarterly payments made to the IRS to cover the tax owed on your income. If you do not pay enough in estimated taxes, you may be subject to penalties. Therefore, it is important to discuss your estimated tax liability with your spouse before getting married.
#5 You May Need To File A Gift Tax Return
- If you are getting married, you need to be aware that it will have an impact on your taxes. Specifically, you may need to file a gift tax return.
- This is because when you get married, any gifts that you receive from your spouse are not considered taxable income. However, if the value of the gifts exceeds the annual exclusion amount, which is currently $15,000, then you will need to file a gift tax return.
- Additionally, if you are planning on making any sizable gifts to your spouse during your marriage, you should be aware that those gifts may also be subject to the gift tax. As a result, it is important to speak with a tax professional before getting married to understand how it will impact your taxes.
Conclusion
While many factors go into calculating a person’s tax bill, getting married is one event that can have an immediate impact. Getting married may change the way you file your taxes, so it’s important to understand how marriage affects your tax liability. If you’re planning to tie the knot soon, make sure you consult with a qualified accountant or financial advisor who can help ensure that you take all of the necessary steps to minimize your tax burden. Thanks for reading!
