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Mid-Year Tax Planning For Newlyweds

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Income Taxes, 1040, Tax Scams

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420x316-grad-lee Dee Lee
Dee Lee is a Certified Financial Planner who received a diploma in...
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BOSTON (CBS) – Its summer and taxes are not on your radar screen! All you care about is keeping cool and getting to the beach. But this is a good time to do some tax planning. You may want to take the time to meet with your tax advisor or financial planner for more help as well.

We talked about newlyweds in June and now that they are back from their honeymoon there are some mundane but necessary details that need tending to. And if you divorced this year, much of this information applies to you also.

The first things to handle are changes of names and address. If you have decided to change your name, make a list of everyone who needs to know your new name and address. A new trend is for a couple to take each others last names and separate them with a hyphen.

If you chose to use your spouse’s last name, the first change of name & address should be the Social Security Administration to update your information.  Do the same with your employer and then start the changes on all of your financial accounts, credit cards and legal documents.

If you and/or your spouse have a new address, notify the U.S. Postal Service as well so they’ll be able to forward your mail. You can do this online for a $1 charge to your credit card or pick up a form at the post office.

The Postal Service will also pass on your new address to the IRS so they can update your account, but I would suggest you also notify the IRS directly by sending them a Change of Address form 8822.

Your marital status on December 31 determines whether you are considered married for that year. Married persons may file their federal income tax return either jointly or separately in any given year. Choosing the right filing status can save you money.

Figuring the tax both ways can determine which filing status will result in the lowest tax – usually, it’s filing jointly. Publication 501, Exemptions, Standard Deduction, and Filing Information, has detailed information on filing status.

Check your tax withholding, your combined incomes may place you in a higher tax bracket. Or if there is only one income that also will change your withholding. You can use the IRS Withholding Calculator to assist you in determining the correct amount of withholding needed for your new filing status.

The IRS Withholding Calculator will even provide you with a new Form W-4, Employee’s Withholding Allowance Certificate you can print out and give it to your employer so they can withhold the correct amount from your pay.

Review all of your retirement accounts and update the beneficiary designations. Life insurance beneficiary designations should be updated as well. If you had designated your brother as the beneficiary on your life insurance policy and you should pass away without a change, he will receive the proceeds from the insurance and not your new spouse.

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You can hear Dee Lee’s expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m., 3:55 p.m., and 7:55 p.m.

Subscribe to Dee’s Money Matters newsletter here.

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