I Just Got Married – Do You Have A Newlywed Tax Checklist For Me To Follow?
When you get married, your tax situation can change in a few ways. Join Ralph Estep Jr. on this Tax Talk Thursday edition of the Ask Ralph Show as he discusses the various financial and tax considerations for newlyweds. The episode covers everything from name changes and new filing statuses to adjusting withholdings and updating benefits. Ralph provides a comprehensive checklist to help newly married couples navigate their new financial landscape, ensuring they are well-prepared to tackle these changes and potentially save money. The importance of tax planning and the potential impact on tax credits and deductions are also discussed. Additionally, Ralph emphasizes the value of proper planning and the Best Newlywed Tax Strategies.
Watch Now on Rumble
https://www.askralphpodcast.com/newlywed-tax-checklist/
Introduction
Ralph introduces the topic of newlywed tax considerations, focusing on the financial implications of marriage, particularly regarding tax filing. The episode is aimed at guiding newlyweds through the often overwhelming financial changes that come with marriage. Ralph assures listeners that by the end of the discussion, they will be equipped to navigate these changes effectively.
Listener's Question
A listener named Glenda from South Dakota asks Ralph for advice on managing her taxes now that she is married. She expresses her concerns about the numerous financial adjustments required after marriage, which seem more daunting than the wedding planning itself. Ralph congratulates her on her marriage and emphasizes that her concerns are common among newlyweds. He reassures her that the episode will provide a comprehensive guide to help her manage these financial changes effectively.
Importance of Addressing Name Changes
Ralph explains that if a newlywed changes their name after marriage, they must ensure that the name on their tax return matches the name registered with the Social Security Administration. Failure to do so can lead to complications, such as a rejected tax return. Ralph advises listeners to file Form SS-5 with the Social Security Administration to update their name. He emphasizes that this step is crucial to avoid future problems when filing taxes.
Updating Employer and Withholding Adjustments
Ralph advises newlyweds to inform their employers of any name changes and to fill out a new W-4 form. This form is essential for determining how much federal income tax is withheld from their paychecks. He explains that newlyweds may need to adjust their withholdings based on their combined income, as they could end up in a higher tax bracket. Ralph suggests using the IRS withholding calculator to determine the correct amount to withhold and recommends consulting with a tax professional if necessary.
Reviewing Filing Status Options
Newlyweds have two main options for filing taxes: married filing jointly or married filing separately. Ralph explains the benefits of each option and the circumstances under which one might be more advantageous than the other. For instance, married filing jointly usually results in a lower tax liability and higher standard deduction, while married filing separately might be beneficial in cases involving significant medical expenses or income-based student loan payments. Ralph advises listeners to consult with a tax professional or use tax software to compare both filing statuses.
Adjusting Deductions and Reviewing Benefits
Ralph discusses the importance of understanding the differences in deductions when filing as a married couple versus as an individual. The standard deduction for married couples is significantly higher, which may influence whether they choose to take the standard deduction or itemize. Ralph also highlights the need to review and update employer-sponsored benefits, such as health insurance and retirement account beneficiaries, as marriage is considered a qualifying life event that allows for changes outside the usual open enrollment period.
Deciding on Combining or Separating Finances
One of the most significant financial decisions newlyweds must make is whether to combine or keep their finances separate. Ralph emphasizes that there is no right or wrong answer, as the decision depends on what works best for the couple’s relationship. He advises discussing this issue early to avoid financial stress, which is a common cause of marital strife. Ralph also mentions the importance of understanding each other’s financial situation, such as pulling credit reports before marriage.
Updating Address and Considering Tax Credits
If newlyweds move in together at a new address, they need to update their information with the IRS by filing Form 8822. Ralph also advises them to consider how marriage might impact their eligibility for certain tax credits and deductions, such as the Earned Income Tax Credit. He suggests reviewing these credits and deductions with a tax professional to avoid surprises at tax time.
Planning for the Next Tax Year
Ralph stresses the importance of tax planning beyond the current tax season. He encourages newlyweds to start thinking about next year’s taxes now, particularly if one spouse is self-employed. Proper tax planning can help them make necessary adjustments throughout the year, rather than facing unexpected issues when it’s too late to make changes.
Conclusion and Recap
Ralph concludes the episode by recapping the key points covered, including updating names with the Social Security Administration, informing employers, choosing the correct filing status, adjusting withholdings, and planning for the future. He emphasizes that while the changes may seem overwhelming, they are part of the exciting journey of marriage. Ralph encourages listeners to approach their financial journey together, supporting each other and building a strong financial foundation for their future.
Final Thoughts
Ralph leaves listeners with a final thought on the importance of joining financial journeys in marriage. He views marriage as an opportunity to grow together, support each other, and build a solid financial foundation. He closes by encouraging listeners to honor God with their financial decisions and reminds them to stay financially savvy.
Join our email list and get a free copy of “Mastering Your Finances” at https://askralph.com/
Application for Social Security Card
