The tax code is always evolving. Credits and deductions come and go. It is sometimes particularly hard for married couples to keep track of income tax issues. For this reason, we offer a few tips for you, if you are married and filing an income tax return.
The Marriage Penalty is often brought up around tax time. The marriage penalty is a method the Internal Revenue Service uses in relation to couples with an adjusted gross income of $110,000 or more. This would put you above the 15% tax bracket and trigger the phase out of personal exemptions and child tax credits. The marriage penalty also reduces itemized deductions. There are, however, other ways to reduce your tax liability as a married couple.
Because you have the choice to file separately or jointly, you need to determine which option will save you more in tax liability.
If you are newly married, in order to file as such you need to have been married on or before December 31 of that year. If your last name changed because of getting married, remember that you need to obtain a new social security card with your new last name.
If you or your husband or wife ran up a number of medical bills in the tax year, you might want to consider filing separately. The burden of those expenses on a joint filing may cause you to lose deduction choices and impact your return negatively. However, always research any decision to change your filing status in depth before doing so.
If you have unpaid tax debt prior to your marriage, it could negatively impact your new spouse come tax time, particularly if you are filing a joint return. Any refund your husband or wife is expecting from their tax return could be held against your unsettled debt. The Internal Revenue Service does have relief options for such situations. It may, nonetheless, be advisable for you to file separately, depending on the size of your tax burden and your ability to pay. It would be kind of you to inform your spouse prior to any sudden revelation of your tax debt.
After you are married, remember to change your withholding status. At the single rate of withholding, you will be overpaying your tax obligations to the federal government and you don’t want to do that.
Always consider talking to a tax professional about preparing your taxes for you. Such professionals are accredited and trained. They keep abreast of current tax trends and changes. Now that you are married, you want to take advantage of all the tax credits and deductions your new status allows. Tax professionals are fully capable of helping you achieve that goal.
Article Source: http://www.articlesbase.com/taxes-articles/tax-tips-for-married-couples-1467240.html
About the Author:
Chintamani Abhyankar, is a well known expert in the field of finance and taxation for last 25 years. He has written many books explaining inside secrets of the magic world of personal finance. His famous eBook Stop donating your money to IRS which is now running in its second edition, provides intricate knowledge and valuable tips on personal finance and income tax.