You've tied the knot, but when it comes to taxes, you definitely don't want to encounter any knotty problems. Not to worry. True, there definitely are some specific tax considerations for married filers. And some taxpayers might find they are paying slightly bigger tax bills. But marriage also offers many tax advantages.
Filing status
Your wedding date is as important to the IRS as it is to you. For filing purposes, you are married for the full tax year as long as you exchange vows by Dec. 31.
After you're married, you can send in your returns jointly or as married filing separately. Most couples prefer the joint option, but depending upon your particular financial and tax circumstances, separate filings could be warranted.
Joint filing typically is a good idea if you both work and one makes considerably more than the other. Combining incomes could bring the higher earnings into a lower tax bracket. Some tax credits are only available to a married couple when they file a joint return. And logistically, it's easier to deal with just one return.
_____________________________________
Need Help Investing? More Stories from Bankrate.com:
- How to Plan for Retirement
- Asset Allocation Explainer
- How to Tell if Your Retirement Plans are on Track
_____________________________________
Separate returns might be preferable if one spouse has large medical bills and can meet the deduction threshold by considering only his or her income. Other itemized deduction thresholds (miscellaneous deductions or casualty losses) also could be easier for just one partner to meet.
Keep in mind, though, that if one spouse itemizes on his or her separate return, the other spouse also must itemize. That could pose a costly problem for a spouse who has no or few itemized expenses and would be better off claiming the standard deduction.
Separate filing also is recommended when a spouse has concerns about tax claims the other wants to make. In most situations, when couples file jointly, each partner accepts equal responsibility for any tax due or penalties that might be assessed if problems arise with the return.
Marriage penalty or bonus
One penalty of concern to couples has nothing to do with tax return mistakes. It's the marriage penalty, where some dual-income couples find that their combined tax bill is larger than it would have been if they were still filing singly.
However, tax law changes since 2001 (and in effect through 2010) have eased the possible penalty. The standard tax deduction for joint filers is now double that of a single taxpayer. More important, the maximum income in 10 percent and 15 percent tax brackets for joint filers is now double that of a single filer. That effectively means that couples in these brackets are taxed as if they were still single taxpayers.
Despite the changes, some couples still could face a bit of marriage penalty. This occurs when their combined earnings push them into the four higher brackets (25 percent, 28 percent, 33 percent and 35 percent), where the income amounts are not strictly doubled.
And some couples actually enjoy a marriage bonus. This is often the case when there is a large difference between a husband's and wife's incomes.