Tax Consequences of Getting Married

Brian SingletonBlog, Watch Your Wallet

Marriage can make changes in your tax situation, some good, some bad. Some of  the changes are listed below.

Change in filing status:

  • Instead of filing single or head of household, if you are married by the end of
    the year, you will file either married filing joint or married filing separate.
  • The marriage penalty is still alive for taxpayers with higher incomes. If you can keep your joint
    income under $94,100, you will be in the 15% bracket, and you will not see the marriage penalty.
  • If your incomes are close, your tax bill should not be much different by being married.
  • If one of you received an earned income credit last year as a single parent, getting married will
    most likely yield a smaller refund.
Married filing separately can have its drawbacks:

  • Rental property losses are not deductible.
  • If you receive Social Security, more will be taxed.
  • The deduction for an IRA contribution is very limited.
  • Credits for dependents in college are not available.
  • Credits for child care are not allowable.
  • You do not qualify for earned income credit.

Name Change

If your name changes with marriage, you should contact Social Security. The IRS uses records from Social Security to cross check Social Security numbers with names. It would be wise to file Form SS-5 (application for a Social Security card) to correct the situation. Your Social Security number will remain the same.

Address Change

You should consider filing Form 8822 with the IRS.

Circumstance Change

If you purchased health insurance through the Health Insurance Marketplace, you could have a change in your premium credit. Reporting the change could avoid a tax surprise.

Withholding Change

Your current withholding on your job as a single person is higher than the married rate. The married withholding tables were set in place during a time when families had one wage earner. Now it’s more common for both to work. The married tables work great for the one earner family, but it wise to get some tax help from a professional to set up the withholding correctly if both of you work.