A walk down the aisle ushers in some major life changes. One thing that few couples consider is how their tax returns will be affected by their recent nuptials. Below is a brief introduction to the subject, highlighting three ways taxes are impacted by marriage.
3 Ways Your Tax Returns Will Be Affected by Marriage
1. Your Filing Status Will Change
Most unmarried people file their tax returns as "single." Once you're married, that status changes to either "married, filing jointly" or "married, filing separately." The tax year goes by the calendar year, so even if you were single most of the year and were married later in the year, you still must file as a married person. In most cases, filing as "married, filing jointly" will give you the most tax benefits.
2. Your Increased Standard Deduction Is Raised
Those with "married, filing jointly" status are allowed a personal deduction standard that is significantly higher than the deduction limits offered to a single person or a married/single-filer. The 2017 rate is $12,700 total for joint filers. Comparing that to the $6,350 given to single and married/single filers, the doubly high limit makes a good case for filing jointly: you can take a lot more deductions.
3. Your Tax Bracket Goes Up, Too
Obviously, with two incomes coming in, your annual income is going to increase as well. That means your tax bracket could be raised from where it was when you were a single-income earner. The Tax Foundation has assembled a series of charts outlining in detail the 2017 tax brackets. Be sure to check out Table 2 to see if your tax rate has escalated now that you're married.
Tudor Wilson & Associates, CPAs, has provided tax planning and preparation service to the Honolulu, HI, area since 1999. Call (808) 592-2000 or visit their website to get help in any area of tax preparation from a certified account. Also, be sure to follow Tudor Wilson & Associates on Facebook to keep up to date on important tax-related news and information. Now that your wedding day is behind you and your filing status officially changed, it's time to start thinking about your taxes; call Tudor Wilson & Associates today.