Don’t Overlook These Tax and Financial Issues When Planning a Wedding by Stephanie Gutierrez, CPA
The excitement of planning a wedding should not take a back seat to the necessary tax and legal issues that newlyweds will face after they say, “I do.” As you prepare to walk down the aisle, remember to put these critical steps on your to-do list.
Name Changes. If you plan to take your spouse’s last name legally, you must provide certified copies of your birth certificate and marriage license to the Social Security Administration, the Department of Motor Vehicles, the State Department and the U.S. Postal Service. These government agencies will issue you copies of your Social Security card, driver’s license and passport with your new name. You should also update the name on all your financial accounts, including checking, savings and brokerage accounts, and notify your employer and your benefit-plan administrator to ensure that your new name matches your Social Security number, which you will need to file your tax returns. Similarly, if your wedding results in a move, you and your spouse will need to inform the IRS of your new address.
Tax Changes. Getting married changes your filing status (i.e., from single to married filing jointly or married filing separately) and may alter your tax bracket, depending on your combined income as a couple and your ability to claim tax credits and deductions. Newlyweds should be aware of the dreaded marriage tax penalty, which may require additional tax withheld from their pay or the payment of quarterly estimated taxes during the year to avoid a larger-than-expected tax bill come April. Consult with a CPA or qualified tax advisor to help you make informed decisions and take appropriate actions to meet your unique needs and goals.
Insurance Changes. Whether you are moving into your spouse’s house or apartment, or they are moving into your home, remember to add both names to the homeowner or rental policy and don’t forget to assess your existing auto insurance coverage. By combining both vehicles under one policy or combining your auto policy with your property insurance, you may be eligible for substantial discounts.
As for health insurance, a new marriage is considered a qualifying life event that allows you 60 days to change your coverage, whether you decide to add your new spouse to your employer plan, enroll in your spouse’s employer plan or find new coverage on the Marketplace. Take the time to understand all the options available to you, including the names of the participating physicians, the benefits covered, deductible amounts, copays and premium payments.
Plan for the Future. After exchanging vows, couples should also review and update their wills and other estate-planning documents to account for their change in marital status. This may include naming a new spouse as beneficiary of retirement plans, granting them power of attorney over your financial and medical decisions, and taking out life insurance policies to protect each other and their future dependents in the event one of them passes away unexpectedly. It is equally important that you and your newly betrothed take the time to engage in discussions about your shared financial goals and how you can work together to achieve them.
About the Author: Stephanie Gutierrez, CPA, is a senior manager of Tax Services with Berkowitz Pollack Brant Advisors + CPAs, where she works with entrepreneurs and high-net-worth families to develop and implement strategies for business, individual and estate tax efficiency. She can be reached at the CPA firm’s Miami office at info@bpbcpa.com or (305) 379-7000.
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