Taxes as a Wedding Crasher? Wolters Kluwer Tax & Accounting Experts Talk Newlywed Tax Implications

Wedding bells are ringing this summer

Wedding season has begun and as the flowers are ordered and the menu finalized, another important aspect of a successful wedding plan should also include a look at the couple’s soon-to-be tax situation. Wolters Kluwer Tax & Accounting takes a look at tax implications for marriages, including same-sex marriages, which to more and more states, are becoming defined as simply ‘marriage.’ This definition also holds true in regards to tax law.

Many factors impact the tax status of newlyweds

Depending upon several factors, including the incomes of the two spouses and their deductible expenses, their federal taxes may go up or go down upon marriage. The happy couple can also take a few steps to plan ahead to make their financial relationship a happy and successful one.

  • Further tax changes are currently being considered in Congress for same-sex marriages
  • State tax filing rules for same-sex couples vary and depend upon whether they are legally married, in civil unions or in registered domestic partnerships
  • Marriage may make it easier to fund or qualify for a deduction on an IRA
  • Marriage creates different tax reporting requirements in Community Property states
  • Under the tax law, all but the top tax brackets double in size for joint filers compared to single filers, making a marriage bonus under the tax rate brackets more likely than a marriage penalty
  • Filing status upon marriage changes from filing singly or head of household to filing jointly or married filing separately. Generally, filing jointly will provide lower taxes, but there are exceptions
  • Most taxpayers will be better off claiming the standard deduction than itemizing deductions, but, if you itemize, some deductions may be lost or reduced while others may increase upon marriage
  • Name changes should be reported to the Social Security Administration, address changes reported to the IRS, and marital status reported under the Affordable Care Act to avoid tax problems down the line
  • Tax filings and benefit options with employers should be reviewed to determine the best options upon marriage
  • Marriage may produce tax advantages for gifts and estate planning

Making the complex simple

Federal tax expert Mark Luscombe, JD, LL.M, CPA, Principal Federal Tax Analyst at Wolters Kluwer Tax & Accounting, is available to discuss the federal tax issues associated with marriage.  State tax expert Timothy Bjur, J.D., Senior State Income Tax Writer/Analyst at Wolters Kluwer Tax & Accounting, is available to discuss the state tax issues associated with marriage in more detail.

PLEASE NOTE: The content of this article is designed to provide accurate and authoritative information in regard to the subject matter covered. The information is provided with the understanding that Wolters Kluwer Tax & Accounting is not engaged in rendering legal, accounting, or other professional services.

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Contact:  To arrange interviews with Mark Luscombe, Timothy Bjur or other federal and state tax experts from Wolters Kluwer Tax & Accounting on this or any other tax-related topics, please contact:

MARISA WESTCOTT
212-771-0853
Marisa.Westcott@wolterskluwer.com

AUTHOR

Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax and Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2016 annual revenues of €4.3 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).

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