4 Smart Tax Tips for Newlyweds
Tying the knot is one of the most important life events anyone can experience. You’re not only combining families, but you are also combining finances. Although we cannot necessarily hold your hand through learning to get along with your new in-laws, our tax advisors do have some smart tax tips for newlyweds to help you navigate your new financial future as a married couple!
Tax Tips for Newlyweds
Your Tax Returns
1. Choose the Right Status
Your filing status is key to determining how much you’ll owe, or how much you may be getting back on your tax return. It’s also one of the most immediate changes you’ll need to address as a newlywed. Usually, newlyweds choose to file jointly for the best tax breaks. In fact, 2020 tax brackets show a mere 10% tax on the first $19,750 of taxable income for couples who filed jointly. The IRS also offers jointly filing couples one of the largest standard deductions each year! Although you and your spouse will have a higher tax responsibility if you file separately, there are some instances in which it makes more sense. If you and your spouse have high or unpaid student loan debt or one of you has unusually high medical bills, filing separately may be the best.
2. Update Your Forms
As we mentioned before, there are plenty of tax benefits to be utilized as a married couple, and that starts with your tax return. In addition to changing your filing status, there will be some upgrades you’ll need to make on your forms. To start, you should file a new W-4 form with your employer. Since most marriages inevitably involve a financial shift, it’s highly unlikely that your withholdings on your W-4 will remain the same. On the one hand, withholding too much will be a financial drain to you, while failing to withhold enough could lead to an unpleasant surprise when you file your tax return next year! Either way, there’s too much at stake with your tax liability to guess on your W-4. That’s why now could be a great time to enlist the help of a tax advisor.
Tax Tips for Newlyweds
Your Tax Planning
3. Build a New Strategy
When it comes to building the best tax planning strategy, you’ll need to think beyond just your tax returns. For instance, there may be some new opportunities to save some money through your employers, now that you’re married. Make a list of any tax-favored fringe benefits offered at your workplace and your spouse’s workplace. If you can be covered under your spouse’s medical plan, consider swapping your current medical plan for another benefit. Just like a healthy marriage, it takes teamwork to make the dream work when it comes to your taxes!
4. Work with the Right CPA
While it’s you and your spouse against the world now, you may want to consider adding a professional tax advisor to the dream team. Although there will be upfront fees, the right CPA will make the expense worth it in the long-run. But what makes a good CPA? Simply put, you’ll want to look for an advisor who works with you all 365 days of the year, not just the few months during tax season. With the right tax advisor, you’ll be able to keep more of your hard-earned money, and put it towards your future plans and dreams as a couple!
At Lifetime Tax Advisors, family means everything to us. That’s why we excel at helping clients build the right tax strategies for their families. From newlyweds building a family to retirees taking care of their legacy, our tax team is passionate about helping clients through every chapter in life. If you’re ready to secure a brighter future on this new adventure, give us a call at (972) 771-6707 or visit our website today!
Start Your Marriage off Right
Whatever your tax needs are as newlyweds, we have the solutions to meet them! Take your next step toward becoming a Lifetime Tax client by clicking the “Learn More” button below.