To help ease the process and avoid a last-minute scramble (or need to file an extension), here are the basic steps you’ll need to take to file properly.
Most of the firsts you’ll enjoy together during your first year of marriage are fun, easy and stress-free—filing joint taxes is most likely not one of them. It’s completely normal if one or both of you find the process incredibly overwhelming, in which case it would be smart to hire a certified public accountant (CPA) who can help guide you through the process. He or she can also queue you into certain tax benefits you might not be aware exist for you now that you’re married.
To help ease the process and avoid a last-minute scramble (or need to file an extension), here are the basic steps you’ll need to take to file your taxes properly.
First decide if you’re filing single vs. married.
Yes, even if you’ve said “I do” and are legally wed on paper and everything, you can choose to file separately. In fact, it may even be a wiser decision financially. “With some high-earner marriages, where the joint income exceeds $250,000, there is a potential marriage penalty because they’re thrust into the highest bracket,” explains Vincenzo Villamena, the managing partner of the CPA firm, Online Taxman. In this type of scenario, he says it’s better to file separately.
Settle any name changes with the appropriate entities.
If you or your spouse changed your last name(s) since your nuptials, you’ll want to make sure to properly report this to the Social Security Administration (SSA). “According to the IRS, if you changed your name (including taking a hyphenated name) and the name on your tax return doesn’t match what the Social Security Administration has on file, you can have problems getting your taxes processed properly,” says Lisa Greene-Lewis, CPA, Turbo Tax Expert. You’ll also want to let your employer know of your new name so they send you a correct W-4 to use when filing your taxes.
Collect all of your statements for both you and your spouse.
This time around, you won’t only need to dig up all your important tax documents, such as your W-2s, 1099 forms and anything else you think you may need when it comes to claiming expenses—you’ll also need your spouse’s. If you own your house or apartment, you’ll need to have your mortgage information on hand as well. “When couples consolidate their accounts, sometimes two documents are produced—one as a single person and another as a couple—so be sure not to double counted,” adds Villamena.
Determine which expenses might be tax deductible
Consider this the beginning of all the “planning ahead” you and your spouse will be doing together pretty much until “death do you part.” Gather receipts for any work expenses, for example any transportation you took to and from your job or a laptop you purchased to for work purposes. You’ll also want to put together a list of any items you donated, for example physical items to places such as Goodwill, or financial donations for fundraisers or charities. College courses and settlement statements if you purchased a home may also be tax deductible.
Choose a CPA who you feel comfortable working with.
Even if you’ve handled all your taxes thus far or used sites like Turbo Tax, it might be a smart idea to hire a CPA (certified public accountant) to help you file jointly for the first time. He or she will be able to act as a financial adviser who can not only help you with tax preparation, but can also guide you through the process and inform you of benefits you might not be aware that you qualify for. “Pick a CPA who will work for both of your needs and recognize that one partner might have more niche needs to serve,” says Villamena. “It is important that he or she is able to serve both of your needs.”
Think about planning for the future.
Ask your CPA about setting up IRAs as well as the tax implications of parenthood. “As a couple, each of you is allowed to contribute up to $5,500 each to a Roth or Traditional IRA,” explains Villamena. “A Roth IRA has certain income limitations, so it is important to be aware of these limitations because if you filed married and are above these limitations, you essentially have to back out or reserve this contribution.” In other words, although one of you might have been able to contribute to these IRAs before, you might now be ineligible because you are married. Parenthood also brings an additional complexity to taxes, as there are child care credits, child tax credits etc.
Double check your results
Once you’ve completed filing your taxes, don’t shut the computer and call it a day. It’s a smart move to review your refund (if you have one) to determine how you may file differently next year or in the years to come.
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