Like many life events, beginning a married life brings many exciting changes. Perhaps not as exciting, but equally important, is your new tax filing status.
"Newlyweds and married taxpayers can choose to file jointly or separately based on their individual situation, but keep in mind that this filing status can change each year," says Mark Steber, chief tax officer, Jackson Hewitt Tax Service Inc. "Generally, using the 'married filing jointly' status provides the lowest tax liability and the highest standard deduction. However, if one of the filers has large deductions or expenses, the 'married filing separately' status may be more beneficial."
Steber reminds newlywed couples filing for the first time to keep the following in mind:
- The Internal Revenue Service recognizes a couple's marital status on the last day of the year. Even couples who wed right before midnight on December 31 are considered legally married for the full 2011 tax year.
- Couples should note that certain credits, including the Child and Dependent Care Credit, the Earned Income Tax Credit and certain education credits, are not available under the "married filing separately" status.
- Tying the knot often results in a new last name. Names listed in your tax return should match all forms of identification, including social security card, passport, driver's license and documents from employers, loan holders and investment accounts.
Published with permission from RISMedia.