Getting Married Soon? Tax Considerations for Newlyweds

Article Summary:

• Filing Status
• Deductions
• New Spouse’s Past Liabilities
• Combining Incomes
• Healthcare Insurance
• Spousal IRA
• Capital Loss Limitations
• Impact on Parents’ Returns
• Social Security Administration
• Internal Revenue Service
• U.S. Postal Service
• Withholding & Estimated Tax Payments
• Health Insurance Marketplace

Do you believe it's hard to prepare a wedding ceremony? Watch for any potential tax implications. Your taxes may be significantly impacted by a number of factors that you should consider and prepare for before getting married if you are getting married this year. Additionally, there are other tax-related steps you should do as soon as you are married.

Considerations Before Marriage

• Filing Status - On the last day of the tax year, a person's filing status is established for tax purposes. No matter when you marry, you and your new spouse will be considered married for the duration of the year. As a result, you will no longer be able to file as single people or utilize the head of household status as you may have done before getting married. The married joint status allows you to combine your income and allowable deductions on a single return, or you may use married filing separate status to file two separate returns. This later status differs from the single status you may have previously utilized and may have some adverse tax consequences. In states that have community property (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin), filing separately might also be challenging. Additionally, the conditions of any prenuptial agreement you may have may influence your decision on filing status.
• Deductions - The standard deduction, which is adjusted for inflation, is $15,000 for single people and $30,000 for married couples in 2025. No deductions are lost if you have both been filing as single and using the standard deduction. But, if one of you had enough deductions in previous years to itemize while the other took the standard deduction, you would either have to take the combined standard deduction or itemize after marriage, which might mean losing some deductions. The standard deduction may also be reduced altogether if one or both of you were previously the head of the household.
• New Spouse’s Past Liabilities - The IRS will use your future combined returns to settle any outstanding bills owed by your new spouse, including past-due child support, past-state income tax liabilities, and federal taxes, as well as any state unemployment income arrear bysubmitting an injured spouse allocation form to the IRSyou have the right to seek your share of the return if you are not liable for your spouse's debt.
• Combining Incomes - When two people file jointly, their earnings must be combined. If both spouses are employed, this may lead to a lot of unpleasant shocks since many tax advantages are decreased or eliminated for higher-income individuals. Some of the most common problems brought on by increasing salaries are as follows:
  • Being pushed into a higher tax bracket.
  • Causing capital gains to be taxed at higher rates.
  • Reducing the childcare credit which begins to phase out when your combined incomes (MAGI) reach $400,000.
  • The childcare credit may be reduced if either or both of you have a child and you both work, because a lower percentage of expenses applies as income increases.
  • The possible loss or reduction of the earned income tax credit which applies to lower income individuals.
  • Limiting the deductible IRA amount.
  • Triggering a tax on net investment income that only applies to higher-income taxpayers.
  • Causing Social Security income to be taxed.
  • Reducing or eliminating medical itemized deductions.

The tax system has procedures to discourage married taxpayers from avoiding the loss of tax advantages that apply to higher-income taxpayers by filing separately, therefore doing so will often not resolve the aforementioned problems.

However, because of the lower combined tax rates, filing jointly will often result in a reduced tax if just one partner earns money. Additionally, in a joint return, some of the higher-income restrictions that could have applied to an unmarried person with the same income may be waived or lowered.

Married people will often pay a greater combined income tax if they file as married but separate. The purpose of the tax rules is to stop married taxpayers from filing separately in order to avoid a restriction that would be imposed on them if they filed jointly. The tax law, for example, requires both individuals who file separately to itemize their deductions if one does so; if one does, the other is unable to take the standard deduction. On a joint return, no SS income is taxed until half of the SS benefits plus other income surpasses $32,000. This is another example of how a married couple's SS benefits are taxed. In the case of a married but separate return, the taxable threshold is zero.

When choosing their filing status, married couples should also take into account the fact that, in addition to the tax amount, they are jointly and severally liable (commonly known as "jointly and severally liable") for the tax and interest or penalty owed on their returns when they file jointly. In spite of a subsequent divorce, this remains true. When filing under the married-but-separate status, each spouse is solely liable for their own taxes.

• Healthcare Insurance - Your combined incomes and changes in family size may lower the amount of the premium tax credit to which you would otherwise be entitled if you or both of you are purchasing health insurance through the government Marketplace. In this case, you may need to repay part or all of the credit applied in advance in order to lower your monthly premiums. Even more difficult is the fact that the insurance premiums for your parents' Marketplace coverage must be transferred from their return to yours if you are both covered by it.
• Spousal IRA - Married taxpayers who file jointly and have one spouse with little to no income may open a spousal IRA. The deduction is capped at $7,000 (2025) or 100% of the working spouse's wages, whichever is lower. For 2025, that allows a combined yearly IRA contribution limit of up to $14,000. Each spouse who is 50 years of age or older raises the limit by $1,000. The deduction for contributions to both couples' IRAs, however, can be restricted if one of them is enrolled in an employer-sponsored retirement plan.
• Capital Loss Limitations - A married couple may only deduct up to $3,000 in capital losses on their tax return while filing as unmarried, but each person can deduct up to $3,000 on their tax return, for a potential total of $6,000.
• Impact On Parents’ Returns - Your parents usually forfeit that benefit if they have been claiming either of you as a dependant. Furthermore, if you are enrolled in college and are eligible for an education credit, you may only claim those credits on the return where your reliance is reported. Therefore, even if your parents paid the tuition, they will often not be eligible to claim the education credits.
• Impact on State Return - In many states, taxpayers must utilize the same filing status that they used on their federal return while submitting their state return. The impact on your state return should also be taken into account when choosing which filing status is best for you.

Things To Take Care of After Marriage:

• Notify the Social Security Administration - Notify the Social Security Administration of any name changes so that your SSN and name appear on your subsequent tax return. Notifying the SSA of a name change is quite easy. An online website is offered by the Social Security Administration to complete this process. If your name and SSN are found to be different when your return is submitted, your income tax refund might be postponed.
• Notify the IRS - You should submit Form 8822, Change of Address, to the IRS whenever your address changes.
• Notify the U.S. Postal Service -In order for any mail from the IRS or state tax agencies to be sent, you need also let the USPS know when you move.

• Review Your Withholding and Estimated Tax Payments - If you and your new husband both have jobs, your combined income can put you in a higher tax rate. This might result in an unpleasant surprise when you prepare your first year of marriage tax return. However, filing jointly with your new spouse might provide a substantial tax advantage if only one of you works. This allows the working spouse to lower their anticipated tax payments or withholding. In either scenario, it can be a good idea to check your withholding (W-4 status) and any projected tax payments to make sure you won't be under-withheld and to avoid giving yourself a terrible break the next filing season. A tax withholding calculator and links to the form are available on the IRS'sW-4 webpage.
• Notify the Marketplace - You must report your change in marital status to the federal Marketplace if you or your spouse have acquired health insurance via one of the Marketplaces. If a parent added you to their health insurance coverage via the Marketplace, the parent is required to tell the Marketplace. There may be issues with tax filing if the Marketplace is not informed.

Please give our office a call if you have any concerns regarding how your new marital status will affect your taxes.