4 Tax Mistakes Newlyweds Commonly Make

16 July 2020
 Categories: Finance & Money, Blog

One of the many first-time experiences for newly married couples involves filing taxes together. It is easy to assume that if you filed taxes in the past, there is little difference to expect when filing together, but that type of mindset can set you up for trouble. Filing individual taxes is not the same as filing joint taxes when you are married. Make sure you remember this factor so that you do not make a mistake.

1. Quickly Deciding to File Together

Do not automatically assume that because you are married you must file together. Married couples have the option of filing joint returns or separate returns. You should always research each option to determine which filing status is the best financially. Instances where one spouse has a high number of itemized deductions or is a business owner generally involve those where filing separately makes sense.

2. Not Ensuring Names Are Updated

If you got married just before income tax filing time, make sure your name change has been applied for, approved, and updated. If you file before the name change has been updated in the government's system with your new name, your taxes will not be accepted. If it is close to the tax deadline, this denial could even lead to late-filing fees. Contact the Social Security Administration to see if your name change has taken effect if you are unsure.

3. Not Knowing Your Spouse's Tax History

Have a conversation with your spouse about their tax history. More specifically, find out if your spouse has a tax liability. If your spouse owes money to the government and you are due a refund, you may not want to file together. If you are filing jointly, your refund share will be intercepted and applied to their tax debt. You will need to file an injured spouse's form to protect your refund, but to be safe, you can file separately.

4. Forgetting to Talk About Your Spouse's Children

If your spouse has children from a previous relationship, make sure you get all the details about how the children will be applied as dependents before you assume anything and file. Parents generally come up with agreements about who can claim the children. If you claim the children and you are not supposed to, it can lead to trouble, and if you do not claim them and you are supposed to, it will lead to missed tax credit opportunities.

Remember, there is a lot that goes into filing your taxes. If you want to be certain that your returns are accurate and you are not overpaying or underpaying, always rely on a trusted tax professional. If you're filing taxes for the first time as a married couple, talk to tax services in your area for advice.