For this, the first week of August, KMT will be taken over by a guest blogger – my mom. Ann Stone is an expert in tax and financial accounting (with over 30 years of experience) and has helpfully agreed to share some of her knowledge with you… my future legally married couples.
I know, I know. Finances and taxes are super boring – bring back the pretty pictures and floral centerpieces. But listen.
Getting married is not about those things – it is about becoming a legally recognized couple bound by the rules and regulations of this country… and that includes the IRS.
Expert Tip: Two Can Live as Cheaply as One and Other Facts and Fallacies
You are planning on getting married but how will the date you set affect your tax filing when April 15 rolls around?
Remember this hard and fast rule:
The day you are married rolls back you're filing status to January 1 of that year. What in heavens name does that mean?
Well, in IRS terms, you have been married the entire year even if the happy day falls on December 31. This would seem like no big deal but remember if your folks have been taking you as a dependent – you are no longer their dependent, even if they supported you all year.
Once you are married, remember that they cannot take an education credit for you even if they have paid all of your fees for the year. This could be a crunch to them so be sure you remind them in advance.
They aren't just losing a child . . . they are losing a dependent and a tax credit, as well. Ouch!
Oh! If the marriage doesn't work . . . You are no longer married in the eyes of IRS for the entire year even if the divorce is final December 31.
An important note:
Remember if one of you changes your last name with the marriage ceremony then that spouse needs to go to the Social Security office with their birth certificate and marriage license in hand to get a new Social Security card issued before you file your taxes.
The IRS will send your return back unprocessed if you forget this step.
Should you two file Married Filing Jointly or Married Filing Separately?
That will be up to the two of you to decide but in my experience; it is rare that Married Filing Separately is ever the best choice.
1. It works if you are able to file a Schedule A, due to medical expenses, but jointly you would have too much income to qualify for the 7.5% reduction.
2. Use this status if you question your spouse's ethics on your joint return. Remember that once you sign, you are telling IRS that you agree with everything on the return.
H-m-m-m. If you fall in to this situation perhaps it might be a good idea to reevaluate the advisability of a marriage to this” tax dodger“.
My advice is to complete your tax return both jointly and separately to see which is best for you both.
One partner could become the dependent of the other if they met all of the dependency requirements.
For help check out this tutorial from the IRS: http://www.irs.gov/app/understandingTaxes/hows/tax_tutorials/mod04/tt_mod04_01.jsp