by Iris Abelson, CPA
Are you considering getting married soon? Have you recently tied the knot? You may not think of these as tax questions, but your marital status can have a big impact on your tax situation.
For example, you may be wondering whether it’s best to file taxes as single or married. But with the exception of a few special circumstances, the decision is easy: if you’re married on the last day of the tax year, you file as married. You can choose between married filing separately or married filing jointly, but filing as single is no longer an option. In many circumstances, deciding between married filing separately and married filing jointly is just a matter of calculating things both ways and choosing the one that gives you the greatest tax benefits. However, it is only an unusual set of circumstances in which married filing separately is beneficial. The IRS has a very clear page on its website about filing status that goes into detail for each type, including head of household.
When you get married, remember to check with your employer. You will need to complete a new W-4 form. Remember that how you file has no relationship to what you put on your withholding form where you work. Also, your employers won’t automatically change your information just because they know you’ve gotten married; you need to fill out a new form. Make sure that it correctly reflects your actual status: single, married or married but withholding at a higher single rate.
If you are contemplating marriage soon, you might want to compare your tax situation as a married couple rather than two single taxpayers. Choosing a date in 2011 rather than the beginning of 2012 could make a difference in the amount of tax you incur. While in general the marriage penalty has been eliminated, there are situations in which your tax burden could be lower, based on the year in which you marry. You may want to contact your accountant to determine if the tax implications are material.
The contents and opinions contained in this article are for informational purposes only. The information is not intended to be a substitute for professional accounting counsel. Always seek the advice of your accountant or other financial planner with any questions you may have regarding your financial goals.