This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

10 Tax Tips For Newlyweds

Matt Armstrong, a financial adviser (and a newlywed) at Rockford, Ill.-based Savant Capital Management

The best advice for newlyweds is to review your filing status, exemptions, income and withholding during the year you are marrying, the earlier the better. This will give you time to tweak your exemptions, increase or decrease the amount of federal tax coming out of your check with a smaller impact on your monthly cash flow and help avoid that April 15 surprise.

More specifically, tax situations that exist as single taxpayers can occasionally create adverse consequences as a married couple, leaving the tax preparer doubling as a marriage counselor.

Just remember: The past year is done. It cannot be changed. So if your new spouse made $30,000, had minimal withholding and you now owe $4,000, outside of burning up cash flow to contribute to an IRA or HSA you may qualify for an installment agreement (See IRS Form 9465) that will spread the payments over a year or more. Focusing on the obvious can create undue harm to a new marriage; instead, focus on the changes to the current year that can help you avoid the same outcome next year.

Paul Gevertzman, partner at accounting firm Anchin, Block & Anchin in New York City

Taxes on homes owned is a big issue.

For instance, if a home is sold as a result of combining two households, newlyweds may be eligible to exclude some or all of the gain. If the seller owned and used the home as a main residence for at least two of the past five years before selling it, usually the seller can exclude some or all of the gain from taxable income. The maximum exclusion is $250,000, but for joint filers it can be up to $500,000 if they meet all three of these tests:
  • 1. Either one of the spouses meet the two-out-of-five-year ownership requirement.
  • 2. Both meet the two-out-of-five-year ownership requirement as a principal residence test.
  • 3. Neither excluded the gain from a sale of a residence in the two years prior.

Barbara Weltman, author of J.K. Lasser's 1001 Deductions and Tax Breaks 2013.

Newlyweds should take the following key tax steps right after they get married:
  • Notify the IRS of any change of address (Form 8822).
  • Contact the Social Security Administration if one or both spouses changes a name. This will ensure that earnings for purposes of Social Security and Medicare taxes are properly credited.
  • Adjust withholding on wages (file a new W-4 with the employer) if necessary so the couple is not over- or under-withheld.
  • Adjust fringe benefits (for example, it may be possible for one spouse to forgo employer-provided health coverage if the other spouse's employer offers coverage for both so the spouse without employer coverage can get other types of employer-paid benefits).
  • For estate tax purposes, it may be important to protect assets for children of a prior marriage. Even though the estate tax exemption amount may be sufficient to shield most estates from taxation, the use of trusts and other arrangements may be advisable in second marriages.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
HRB $36.57 0.00%
AAPL $110.38 0.00%
FB $92.07 0.00%
GOOG $626.91 0.00%
TSLA $247.57 0.00%


Chart of I:DJI
DOW 16,472.37 +200.36 1.23%
S&P 500 1,951.36 +27.54 1.43%
NASDAQ 4,707.7750 +80.6910 1.74%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs