Wedding Bells and Taxes

Are you getting married in the near future? Or, maybe you’ve already tied the knot just recently. Whatever the case, you should know that making this major life step affects your taxes in major ways, and one of the first things you’ll need to check up on is your tax withholdings.  

The reason this is important is because, when you get married, more often than not, your income tax liability changes due to the sudden addition of your spouse’s income or of your spouse in general. This change may mean you get to withhold more or less, depending on the specifics of your situation, but, either way,it’s important to adjust your withholdings accordingly so that you don’t end up paying too much or not enough on your taxes.   

If you’re not sure how your spouse’s income, or, if your spouse doesn’t have an income, your marriage will affect your taxes, then speak to your workplace’s human resources department or to your financial adviser to learn more and make sure you’re doing everything correctly.

Another thing that you may want to think about if you’re getting married or have recently done so and have a spouse or soon-to-be-spouse who doesn’t work is opening a spousal IRA. When you have a non-working spouse and have filed as married filing jointly, this great option can help you both to begin saving for your future together.

Of course, the decision of whether or not to file jointly or separately is a whole other ball of wax altogether, and what you should do will vary greatly depending on the specifics of your situation. For that reason and because you’re going through such a major change when you marry, it’s always smart to check in with your financial adviser (or to find one!) during this and any other times of transition that affect you financially.