Take A Break Financial And Tax Benefits Of Being Married

Save to notebook Email article Print article More articles

By Mia Bolaris-Forget

Very much still the happily married newlyweds not quite out of your “honeymoon” phase…expect to run into some taxing situations….quite literally.

You’re financial status, after the wedding, has changed…and the government is expecting you to file accordingly. YOU plan on filing “In debt”…the government however doesn’t give you that option.

Among the options you “do” have: “Married Filing Separately” or filing your very first joint tax return.

Joint returns are commonly classified as 1040s. Preparation remains the same and as usual you’ll need to start with the proverbial paper trail, including W-2s, 1099s, last years returns, records of earning, and significant expenditures made individually or together.

It’s imperative you account for the following:
· Individual (and joint) earnings
· Income and expenses incurred from operating your own business.
· Student loans, including interest paid.
· Home Purchases, Mortgage and points or interest paid.
· Itemized assets
· Outstanding debts.
· Financial Savings.
Experts attest that while not all of the above are essential for filing your tax returns, they are an excellent aid to helping you resolve any still outstanding financial issues. Additionally, they offer insight as to areas of impact on your tax returns
Some key considerations:
· Medical expenses incurred
· Donations made
· Payment of State taxes
· Contributions to retirement plans
· Can anyone else still claim you as a dependent
Furthermore, according to experts, assessing your situation may place in perspective legal obligations. They remind you that there are certain requirements that need to be taken care of before you can file as husband and wife, especially if the bride has adopted her husband’s surname. Among your primary considerations:
· Changing your Social Security Card (filing a joint return under a new name without taking that step, could cause a tax problems including delayed returns to disallowed deductions, because the IRS computers wont’ be able to match up your new name and old S.S. #)

OK, so now you’re ready to file. But what you still have two options to choose from; filing jointly, or filing separately.
Most couples find that filing jointly gives them the best return on their marital investment. Experts however remind each to cover their assets by getting acquainted with exactly what is on the 1040. They caution couples that should the IRS investigate, each is equally and individually accountable for everything on the return.
Both husband and wife remain responsible for any questionable concerns, even after a divorce.
Still other couples find it more beneficial to continue to file separately. Deciding factors include:
· Whether or not you were a student supported by your parents for a portion of the year
· Are some of the educational tax deductions more applicable and beneficial to your parents than to your and your spouse
· Did you reside with your parents but intend on claiming yourself as an exemption.
· Did you have extensive medical bills? (Consider that you are only allowed to deduct expenses that exceed 7.5 percent of your gross adjusted income…filing jointly would show larger earnings and could make it more difficult to claim this deduction)
· Did either of you have casualty of theft losses to report (the same rule as medical expenses applies if they exceeded 10 percent of your income)

Double The Pleasure:
Being a team has its advantages, including the pleasure of claiming additional deductions and credits. Increased (household) earnings or shared income may result in some significantly substantial tax breaks not available to those filing separately. Carefully consider your options and seek professional help before making your final decision.