Tax Tips for Newlyweds
At a glance:
- Have a financial game plan.
- Adjust your withholdings.
- Make sure your name matches the Social Security Administration's records.
Congratulations to all of the summer newlyweds! As you start your new lives together I wanted to offer some financial tips that helped us when we first got married as well as a few items I wish we learned sooner. Hopefully it’ll help you build your finances together.
Have a Financial Game Plan Ready
Before you two start tinkering on your finances, having an overall plan for your money and your goals can be incredibly helpful and empowering.
- Do you want to eventually own a house?
- Do either one of you want to start a business?
- Do you want to have children?
- What are your goals for work and retirement?
Get Your Withholding Squared Away
Once you’re married, you may want to update your withholdings. If you’re an employee, you should check out changing your W-4 with Human Resources. Going back to your goals that you’ve discussed, you may want to adjust your withholdings so you get more per paycheck throughout the year.
Perhaps you two may want to get a big tax refund so you can use that lump sum for a big financial goal. Each has its pros and cons, so the two of you have to decide what is the best match for you.
If you do expect a refund or you’re getting a slight increase in your paychecks after the adjustments, here are some suggestions on how you two can use the money:
- Build savings. Having a financial cushion in case of emergencies, a house down payment, or for starting a business can be a smart move.
- Pay down or knock out debt. Starting off your marriage with less debt can be a great financial win. Even if you can’t completely pay off the debt, paying down a bit can save you on interest charges.
- Boost your IRA. If you haven’t created one already, you can use the money to boost your retirement accounts.
Make Taxes Easier Next Year
Even though it’s a bit before you have to file your income taxes, it doesn’t hurt to get prepared now. It’ll make it easier for the two you and it could speed up process (and a refund) if done now.
When you file your taxes your name should match what the Social Security Administration has on record. If they don’t match, you’ll have problems with getting your taxes processed.
Just fill out a Form SS-5 (the application for a Social Security Card) and submit it either in person at the local U.S. Social Security office or U.S. Embassy. You must also submit proof of the name change, so have a certified copy of your marriage license. You can also mail it to the office along with the required documentation.
With just a little effort now you two can make filing taxes less stressful.
Thoughts on Taxes and Marriage
How many of you recently married? How are you two merging your finances? How’s the process going for you?