Filing Taxes the First Year of Marriage: What You Need to Know

Getting married brings about significant changes, including how you approach filing taxes. Understanding the implications of your new marital status on tax obligations is essential to ensure compliance and optimize benefits. Navigating these changes can seem daunting, but with proper guidance, it becomes manageable.

This article will explore key considerations for newlyweds during their first year of filing taxes together.

Filing Status Options

Selecting the appropriate filing status is one of the first decisions married couples face when filing taxes. The IRS offers two primary options: Married Filing Jointly (MFJ) and Married Filing Separately (MFS). Each status affects tax liability and eligibility for certain credits and deductions.

Filing jointly often results in a more favorable tax outcome, as it allows couples to combine incomes and deductions, potentially lowering their overall tax rate. For the 2024 tax year, the standard deduction for MFJ is $27,700, compared to $13,850 for MFS. Filing jointly also provides access to more tax credits, such as the Earned Income Tax Credit and the Child and Dependent Care Credit, which are often limited or unavailable to those filing separately.

However, there are situations where filing separately may be advantageous. For example, if one spouse has significant medical expenses exceeding 7.5% of their adjusted gross income, filing separately could result in a greater deduction. Similarly, if one partner is repaying an income-driven student loan, filing separately might prevent their repayment amount from increasing due to combined income.

Personal Information Updates

After marriage, it’s important to update personal information with the IRS and other relevant entities. If you’ve changed your name, ensure that your records with the Social Security Administration are updated to avoid delays or processing issues. Submit Form SS-5 to your local Social Security office for this purpose.

If you’ve moved, notify the IRS with Form 8822 to ensure all correspondence, including refunds or notices, reaches you. Be sure to update your address with financial institutions and the U.S. Postal Service to avoid disruptions in receiving tax-related documents.

Additionally, update your marital status with your employer by submitting a new Form W-4. This ensures that the correct amount of taxes is withheld from your paycheck, helping you avoid surprises when filing your return.

Standard Deduction Changes

Marriage significantly impacts tax planning, especially through the standard deduction. For the 2024 tax year, the standard deduction for couples filing jointly is $27,700, much higher than the deduction available to single filers. This change can simplify the decision of whether to itemize deductions or claim the standard deduction.

The standard deduction is particularly beneficial for couples without substantial itemizable expenses, such as mortgage interest or medical costs. It streamlines the filing process and eliminates the need to track every deductible expense. Newlyweds managing joint finances often find this approach practical, especially if they don’t yet have significant deductible expenses.

The increased deduction also offers an opportunity to reassess financial goals. Couples can use the tax savings to bolster savings, invest, or pay down debt, aligning their tax strategy with broader financial objectives.

Combined Income Considerations

Combining incomes through marriage often changes income dynamics and impacts taxation. When incomes are combined, couples may find themselves in a higher tax bracket under the progressive tax system. For example, the 2024 federal income tax brackets range from 10% to 37%, with thresholds doubling for married couples filing jointly compared to single filers. This can affect take-home pay and overall tax liability.

Combined income also influences eligibility for certain deductions and credits. For instance, deductions like student loan interest or credits such as the American Opportunity Tax Credit phase out at higher income levels. Understanding how modified adjusted gross income (MAGI) impacts these benefits is essential for effective tax planning.

Adjusting Tax Withholding

Marriage often requires revisiting tax withholding to account for combined financial circumstances. Adjusting your withholding ensures you neither underpay taxes, which could result in penalties, nor overpay, which ties up funds unnecessarily. To make these adjustments, submit an updated Form W-4 to your employer.

The IRS Tax Withholding Estimator can help determine the appropriate withholding based on combined income, deductions, and credits. For example, if one spouse earns significantly more than the other, the higher earner may need to increase their withholding to cover the additional tax liability. Conversely, if both spouses earn similar amounts, they may need to adjust allowances to avoid a large tax bill at year-end.

Life changes, such as buying a home or having children, can also affect withholding. Regularly reviewing and updating your withholding throughout the year helps ensure your tax payments align with your actual liability.

Credits and Deductions Impact

Marriage can affect eligibility for various tax credits and deductions, many of which are tied to income thresholds or filing status. Understanding these changes is key to maximizing tax benefits.

Education-related tax benefits, like the Lifetime Learning Credit or the American Opportunity Tax Credit, phase out at higher income levels. For example, the Lifetime Learning Credit phases out for married couples filing jointly with a MAGI between $138,000 and $158,000 in 2024. Couples whose combined income exceeds these limits may need to explore alternative strategies, such as timing tuition payments to maximize benefits during lower-income years.

Charitable contributions are another area to consider. While the standard deduction simplifies filing, couples with significant charitable giving may benefit from itemizing deductions. Contributions to qualified organizations can be deducted up to 60% of adjusted gross income for cash donations, providing substantial tax benefits for high-income couples who choose to itemize. Evaluating whether to itemize or take the standard deduction involves reviewing all deductible expenses, including state and local taxes, mortgage interest, and medical expenses.

Handling State Tax Differences

State taxes can add complexity for newlyweds, especially if you and your spouse lived in different states before marriage or work in separate states. Each state has its own tax rules, and understanding how these interact with your federal filing status is important for compliance.

In community property states like California or Texas, income earned during the marriage is generally considered jointly owned and must be split equally on state tax returns. This can complicate matters if one spouse earns significantly more than the other, as income-splitting rules may increase state taxes for the lower-earning spouse. In non-community property states, income is typically taxed based on individual earnings, simplifying state filings.

If you and your spouse work in different states, you may need to file multiple state returns. For instance, a couple living in New Jersey with one spouse working in New York may need to file a nonresident New York return while claiming a credit for taxes paid to New York on their New Jersey return. Leveraging tax software or seeking professional advice can help navigate these complexities and minimize the risk of double taxation.