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Learn how marriage affects taxes. Most often this is the furthest thing from our minds during the wedding, but it plays a huge role on your taxes. Learn how marriage can impact your taxes, what are some of the benefits you and your spouse will receive as a married couple and much more.
When it comes to absolutes, it seems that death and taxes are two of the ones that jump out. Now that you are married, although the absolutes don’t change, there tends to be some light at the end of the tunnel when it comes to your taxes.
When you get married, the date of marriage will determine what tax year you can claim as being married. According to IRS rules, as long as you are married by December 31, you are considered married for the entire tax year.
Marriage brings new options (beyond filing single), including filing your taxes together (joint filing) or filing as married, but submitting individual tax forms (married filing separate). Depending upon your situation, one of these filing options may provide far better results than the other. For instance, if both work and one makes quite a bit more than the other, filing a joint return may yield better tax advantages. On the other hand, if one has significant medical debt and is able to meet deduction levels set by the IRS or has tax issues, filing separately may provide better results.
Another potential advantage of filing a joint return is the standard tax deduction. Unlike the previous ‘marriage penalty’ that reflected a lower standard deduction for a couple than if filing separately, the standard deduction rate has been adjusted to being twice that of a single filer. That said, when the combined incomes are considered, joint filers in the higher tax brackets may not realize this advantage. Moving to the higher tax brackets can also result in losing the ability to realize previous deductions available to you.
There are other key areas that are important to understand when you are married, whether filing a joint or separate return.
The moral of the story is that being married can potentially lead to benefits that you didn’t have access to when single…but, it is not an absolute. Being married isn’t the only factor, thus it is important to seek out a qualified tax professional to help you identify the best route when it comes to filing.
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