But right around the bend is another hurdle to clear, and this time mom and dad may not be pitching in.
The hurdle is taxes, and not paying attention to how a marriage changes your tax picture can hit newlyweds in the bank account for years after a wedding.
"When a major life change happens, taxpayers need to know it could impact their tax situation," explains Kathy Pickering, executive director of The Tax Institute at H&R Block (HRB). "Not understanding the impact of the resulting tax changes to the individual and household can be costly."What steps should newlyweds take to maximize their tax situation in marriage, especially in those all-important early years of matrimony? Here's what our panel of experts had to say: Tiffany Washington, founder of Waldorf, Md.-based Washington Accounting Services The most important issue is to decide whether newlyweds should file jointly or individually. Most couples are better off filing jointly, particularly if there's a wide gap in incomes. It's important to get this right. When two salaries are averaged, the lesser of the two could sink the higher one into a lower tax bracket, saving both spouses money. Many people are aware of the "marriage penalty," a fine leveled at some wedded couples, but it applies only to couples earning two relatively high salaries (a combined income of more than $131,450), which might bump them into the 28% tax bracket. When a couple has that much money coming in, submitting separately could be the way to go, because averaging the incomes won't help. The other common reason to file separate returns is when writing off medical expenses. To be deductible, these expenses must add up to more than 7.5% of adjusted gross income, an amount that's easier to achieve filing solo. Lynn Ballou, CFP and managing partner at Lafayette, Calif.-based Ballou Plum Wealth Advisors Some good tax planning opportunities do exist for newlyweds. For example, if one spouse is self-employed while the other is a W-2 earner, you may be able to shift the income tax burden to the spouse with the systematic paycheck. Do that by increasing that spouse's withholding and live on the income the self-employed spouse brings home, thus avoiding the fun of estimated taxes. And if only one spouse has a pretax plan for paying for medical insurance premiums, you can switch coverages to that spouse's plan. It's also important to coordinate participation in IRAs and other retirement plans such as Roth IRAs based on income thresholds. You've got to earn less than $188,000 if married and $127,000 if single to be eligible to fund your Roth. Just because you qualified for the contribution as a single person, don't just assume you can continue to contribute now that you are married.
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