Marriage and Taxes
If you got married this year, congratulations! Getting married is a big step in your life and will also impact your 2022 Tax Return. It can result in a change in filing status, tax bracket, taxable income, dependents, tax deductions, name or address changes, and many other changes.
Let eFile.com help you with the tax part! Just answer a few simple questions during the e-File tax interview and we'll select the correct form(s) for you based on your answers—it's that easy! Prepare and e-File your 2022 Tax Return now or before the April 18, 2023 deadline. However, if you want to learn more about how marriage affects your taxes, read on.
Married Filing Statuses
Your filing status is important and is used for many things on your tax return such as:
Your filing status depends partly on your marital status on the last day of the tax year which is December 31. If you're legally married as of December 31 of a given tax year, you are considered to have been married for the full year and you have the choice of two filing statuses - Married Filing Jointly or Married Filing Separately. There are big differences between the two, so read on to understand them.
With the Married Filing Jointly status, you will include both you and your spouse's taxable income, exemptions, deductions, and credits on one tax return. Even if you or your spouse had no income or deductions, you can still file a joint return. In contrast, you can use the Married Filing Separately status to report your own income, exemptions, deductions, and credits on two separate tax returns. Even if only one of you had income, you can still file a separate return. However, the Married Filing Separately status rarely works to lower a family tax bill. For example, see these many reasons to help you decide:
Use our free STATucator tax tool to find out which filing status is right for you. Answer a few simple questions and the tool will give you a filing status on your return.
When you prepare your return on eFile.com, you can compare filing statuses! For instance, you can first choose the Married Filing Joint status and prepare your return and see your results. You can then easily change your filing status to Married Filing Separate and see the results with that status. You will need to remember to remove your spouse's income for the Married Filing Separate status. This will help you decide and you can then select the filing status that gives you the best result for your specific tax situation. On eFile.com, you will not be charged until you are ready to e-File your completed return.
Marriage Penalty and Marriage Bonus?
A sign that the honeymoon is over:
She begins to feel like she was never anything more than a tax deduction to him!
You've probably heard about the marriage tax "penalty" or the idea that a married couple pays more income tax than they would have if they remained single. A lot of people don’t know that married couples actually get a marriage bonus and often pay less income tax than they would if each partner were single. This is because of the graduated nature of the tax rates, which applies higher tax rates to higher income rates.
This is how the marriage penalty might get you: when you combine incomes on a joint return, some of that income can push you into a higher tax bracket than if you were filing as the Single filing status. In recent years, Congress has made large strides toward alleviating the marriage penalty. The top of the first two tax brackets on joint returns are now precisely twice as high than the ceilings on Single status returns (they used to be less than double).
As higher incomes fall into higher tax brackets, the breakpoints on a joint return aren't quite double as the level on a Single status return. If the spouses' incomes are unequal, it is possible that combining them on a joint return will pull some of the higher-earner's income into a lower tax bracket. That's where much of the marriage bonus comes from: when one spouse often makes much more income than the other. Of course, this could also push the higher-earner into a higher tax bracket.
Tax Withholding and W-4s After Marriage
Once you’ve tied the knot, you and your new spouse will need to adjust the tax withholding from your paychecks. Since the Form W-4 no longer uses allowances to adjust withholding, you will make adjustments based on your filing status, number of dependents, and other income. Additionally, you can adjust your withholding by a dollar amount via the Form W-4.
Don’t make the mistake that many working couples do. Working spouses usually need to worry more about under-withholding than about over-withholding. Be aware that you may go into a higher tax bracket or be required to pay the Additional Medicare Tax by combining your incomes. Not sure how much to withhold? Answer a few simple questions on the free eFile.com W-4 TAXometer tool to find out!
The Form W-4 is complicated; that is why eFile.com have created four free W-4 creator tools to help balance your taxes. Your goal is to match your withholding with the amount you'll actually owe for the year, so you get neither a big tax refund nor a nasty tax surprise when you file your return.
You and your spouse should draw up a list of the tax-favored fringe benefits at each of your workplaces. If you can be covered by your spouse's medical plan, for example, you may choose to trade your coverage for another benefit.
Report Your Name Change
You don't change your name directly with the IRS, but indirectly via the Social Security Administration (SSA), who automatically will inform the IRS about your name change.
For example, if you take your spouse's last name when you get married (or if you and your spouse hyphenate your last names), you need to inform the SSA of the name change. Once the SSA has approved and processed the name change, they will inform the IRS about it via your and/or your spouse's Social Security Number (SSN). That is because the SSN in the IRS and SSA records must be in sync as well. Be aware that a mismatch between the name and/or SSN on your tax return and the name in the SSA and IRS records can cause the IRS to reject your tax return. This would result in processing and delay issues with your tax return and tax refund until the discrepancy is resolved. What if my SSN does not match the SSN on file with the IRS?
Therefore, keep in mind that once you have submitted the name change form or applied online with SSA (see instructions below), it might take several months for the IRS to reflect you or your spouse's new name. During tax season, this might cause a rejection of your tax return. In that case, continue to use your existing names or old names as they are still on file with the IRS and SSA.
In order to change your name with the IRS, you must complete SSA Form SS-5, Application for a Social Security Card, or submit your name change application online at ssa.gov. Or you can obtain the form at your local SSA office or by calling the Social Security Administration at 800-772-1213. Attach a recently issued document to your Form SS-5 that proves your legal name, then take or mail the form to your local SSA office. When you get your new card, you will see your Social Security Number (SSN) and new name.
Once the SSA has changed your name, they will send the information to the IRS. This may take months before the IRS gets notified of the name change and their tax systems gets updated.
Report Change of Address
If you have moved to a new permanent address with your spouse, remember to update your address with the IRS. The easiest way to do this is to e-File your 2022 Tax Return with eFile.com. During the tax interview, you will indicate a change in address, fill in the proper information, and eFile.com will generate the correct form and file it with your return. Alternatively, you can change your address with the IRS by filling out Form 8822, Change of Address, and mailing it to the address on the form. You will also need to update your address with the U.S. Postal Service and your Health Insurance Marketplace.
You may also change your address with the IRS via telephone or written statement. Choosing these methods will require your full name, new and old addresses, your date of birth, SSN (or Individual Taxpayer Identification Number or Employer Identification Number), and any additional information they may request for identity purposes.
If you did not change your name or address at all or you changed it late with the SSA before the filing deadline, you can file a joint return with your spouse using your old name (the one that matches your SSN) and then file the SS-5 before next year's filing season.
Obtain Identification Numbers for Adopted Spouse's Child(ren)
Please make sure that you have a SSN or Adoption Taxpayer Identification Number (ATIN) for each child you adopt so you can claim them on your tax return. You can apply for an ATIN by completing Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions, online here before mailing it to the IRS as they do not permit electronic submissions.. Alternatively, you can obtain the form by calling 800-TAX-FORM (800-829-3676). You may qualify for the Adoption Tax Credit, which helps parents save taxes on expenses involved in adopting a qualified child under 18 years old.
Home Sale, Marriage, and Taxes
The amount of home-sale profit that can be tax-free doubles from $250,000 to $500,000 once you are married. This assumes that you own the house and have lived in it for at least two of the five years prior to the sale. But what if your spouse sold their house before the wedding? The $250,000 limit still applies just as if they were still single. What if they sold the house after the wedding? Then $250,000 of the profit on the sale of the home can be tax-free. Marriage often leads to moving into a new home; click to learn about home improvement claims or money saving tips around the new house.
Check Your Health Premium Tax Credit
If you buy health insurance from the Health Insurance Marketplace and receive advance Premium Tax credit payments, you should report your marriage (and other changes in circumstances such as income, birth of child, new job, home purchase, etc.) to the Health Insurance Marketplace. This will allow the Marketplace to update your premium tax credit amount as well as help you avoid owing money or getting a smaller refund that you do not expect when you file your tax return. When preparing and filing with eFile.com, use your 1095-A to allow the eFile app to report the necessary information on your 2022 Tax Return.
More Related Information on Marriage and Taxes
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