At first glance, understanding the correlation between wedding season and tax season may seem like a far fetched idea. However, there are implications to an individual’s tax status once they decide to tie the knot and make marriage official. In addition, the wedding seasons typically peak in early spring and fall of the year, almost identical to tax due dates - although no one wants to think about filing a return when walking down the aisle, understanding these potential impacts can help for those interested in making financial savvy decisions.
Tax day in 2019 was Monday, April 15 and those who filed extensions have until October 15 in order to submit their return. This corresponds to the spring and fall wedding seasons and also makes an implication on the entire 2018 year. If you were married then, a different return will need to be filed.
Yes, according to the Internal Revenue Service (IRS), if you were married at any point during the 2018 calendar year it counts for the full time. Married one day, including a New Year’s Eve wedding on December 31, 2018 - means the couple cannot file individual returns this year. If you’re expecting a big return, and aren’t aware of what could happen when filing a different style return, then waiting the extra 24 hours could be beneficial.
Unless an individual has been married before then chances are each partner within the relationship will be filing a new style of return. Different from an individual return, married couples have the option to file either joint returns or married, filing separate returns. Understanding how to choose a tax filing status can be difficult, although the IRS encourages (and it most cases couples do) filing joint returns.
Once married, you’ll want to ensure that you update the W-4 status on file with your employer. This way, they know to begin withholding at the married rate vs. a single rate, which could impact your return once filed.
The increased income and potential joint return may increase your tax bracket and cause for more money to be owed than previously required when filing an individual return. Although the marriage penalty may not affect everyone, understanding the potential is there should be something to plan for in order to avoid any surprises.
Depending on at what age you get married, the potential for both individuals to own real estate is increasing. If so, the rules and regulations associated with the home sale tax exclusion may be difficult to navigate depending on who lived where and when, plus the sell dates. Understanding the potential for these impacts, in addition to the possibilities of capitalizing on something with a little patience - waiting for the two-year period to expire - could help in the long run.
The tax and financial experts
at Bloch Rothman and Associates are ready and willing to assist if you should need help with understanding how getting married will impact your taxes, paying or owing back taxes, or any other personal or corporate wealth management issues. In addition to providing a quality tax service, including navigating the intricacies of an audit, our group can also complete tax returns or answer any other factors associated with financial issues or concerns you may have. Serving in Denver and all of the surrounding areas for 35 years, our firm has an extensive history in helping clients with any and all of their tax issues or dealings with the Internal Revenue Service. If you have questions about your personal, business, estate or any other filings, don’t hesitate to contact us today. Available for all of your tax needs and filings, there are also a number of bookkeeping and payroll services offered to assist you and your business. We look forward to meeting you and serving whatever your needs may be soon!