Change in marital status? That can change your tax situation as well.
Posted on August 16, 2019
Changes in your marital or family status are impactful on your personal life. Teipen Selanders Poynter & Ayres wants to remind you that they can be significant to your tax situation as well.
So, along with your 2019 wedding, new baby or finalized divorce, be sure to consider how your life changes may be reflected in your taxes.
Here are 7 proactive steps to take (the sooner the better, as the end of the year is too late) to make filing your 2019 tax return as surprise-free as possible:
1: If your name legally changed due to marriage or divorce, report that change to the Social Security Administration. If the names on your tax return do not match the names on file at the SSA, the IRS may delay your tax return processing, especially if you are due a refund.
- 2. Take a look at your current withholding on IRS.gov using the IRS Withholding Calculator. This helpful tool can help you determine how much more or less to withhold, due to your new status.
3: If a withholding change is indicated, the sooner you complete a new Form W-4, Employee’s Withholding Allowance Certificate, from your employer, the better. You’ll need time to beef up or pare down your withholding before the year ends.
4: If you moved, be sure to let the IRS and the U.S. Postal Service know. File Form 8822, Change of Address, to update your mailing address with the IRS. Then go to USPS.com (or visit your local post office) to make sure your mail gets properly forwarded.
5: Does a change in status affect your health insurance? You should also notify your Health Marketplace if you’ve moved out of the area covered by your current Marketplace plan.
6: If you receive advance payments of the premium tax credit, you should report any changes of household, income or family size to your Health Insurance Marketplace as they happen. This can absolutely affect any potential tax refund or the amount of tax owed.
7: Newlyweds and divorcees should consider their filing status. Your marital status on December 31 of 2019 will determine whether or not you are considered married for that tax year. Generally, the IRS allows married couples to file their federal income tax return jointly or separately in any given year. How do you know which status is better for you? Contact your CPA or use the IRS Interactive Tax Assistant to find out.
Not sure of your particular situation? Not every situation follows IRS guidelines to a T. If you need guidance, don’t hesitate to contact us. We can help you figure out what regulations apply – and don’t – to your life changes.