So you recently tied the knot and have begun your journey towards “Happily Ever After.” What’s the next step? If it is your intention to do a name change, please do so with the MVA(Motor Vehicle Administration) and don’t forget the Social Security Administration. Why the Social Security Administration? For starters, when you file your first tax return as a married couple the name you provide on your tax return needs to match your social security card. The United States Treasury and the Social Security Administration work closely together and if you give a name different from what’s shown on your social security card, the IRS will reject your tax return and this could ultimately delay your refund. The name change (if you decide) should take priority since we all are “supposed” to file a tax return.
Once you’ve done the name change, talk to your partner and decide how you want to file for the upcoming tax year. Do you want to file jointly or individual? Filing Married Filing Jointly has greater tax advantages such as higher deduction and the extra exemption amount. Find out if your spouse has any “lingering” past tax issues and decide the best way to handle those. Such issues can include but are not limited to back child support, medical bills, state balance due or student loans. Once you become married, the IRS can attach itself to the refund of the couple even though the other spouse doesn’t have those “lingering” issues and can potentially keep the whole refund. Don’t worry, you are protected. Just reach out to your tax professional and ask them which better suits you…” Injured Spouse Allocation” or “Innocent Spouse Relief.” This is a fairly simple task and a “seasoned” tax preparer can assist you with this. If you choose to use a company to do your taxes, don’t feel bad in making a request to have an experienced tax preparer handle your tax return. Many online tax programs are helpful and certainly save money but realize the more complicated the tax return, the fees go up. Those programs don’t ask those questions to delve deeper into the taxpayer’s financial position in an effort to reduce the tax liability or maximize the deductions available to the taxpayer.
In the next article we will discuss the benefits of itemized deductions. Feel free to reach out to me directly should you have any questions…. even if you don’t think it’s important or may not benefit you.