Know how getting married changes your tax situation
When you get married, your tax situation changes. Your marital status as of Dec. 31 determines your tax filing options for the entire year. If you’re married at year-end, you have two filing status choices:
- filing jointly with your new spouse, Married Filing Jointly, or
- filing separate from your spouse, Married Filing Separately
Most married couples file jointly because it is simpler and makes you eligible for many tax deductions and tax credits. However, if either spouse owes back taxes, whether federal or state, or owes certain other non-tax debts, such as delinquent child support or student loans in default, the IRS may offset your joint tax refund to satisfy the individual debts. Also, individuals who file a joint return incur “joint and several liability” explained later. Filing separately may seem like a good idea if you’re aware of prior tax and other liabilities of your spouse and don’t want to be responsible for them, but there’s potentially a downside. Filing separately may make you ineligible to claim certain tax deductions and tax credits, such as the child-care credit and the earned income tax credit (EITC). Refer to IRS Publication 501 for more information.
Here are some terms you should be familiar with when deciding how to file:
- Joint and Several Liability. This arises when you file jointly with your new spouse. This means the IRS can collect a joint liability from either you or your spouse even after you’ve divorced if you filed a joint tax return. The IRS can assert joint and several liability for you even if a divorce decree states that your former spouse will be responsible for any amounts due on previously filed joint returns. For any year that you file a joint return, you’re generally “jointly and severally liable” for any federal income tax underpayments, interest, and penalties caused by your new spouse’s unintentional tax errors and omissions or deliberate tax offences. If you file separately, you’ll have no liability for your spouse’s outstanding federal tax debts.
- Innocent Spouse. If you can prove that you didn’t know about your spouse’s tax deficiencies, had no reason to know, and didn’t personally benefit, you can file a claim for exception to the joint-and-several-liability rule under the innocent spouse provisions. The three types of relief available are:
- Innocent spouse relief
- Separation of liability
- Equitable relief
Each type of relief has different requirements. See IRS Publication 971 for more information.
To protect yourself from your spouse’s past, current or future tax liability or individual tax debts, consider filing married filing separate as explained above.
Other issues to consider when you get married are:
- Social Security Numbers (SSN): Update the Social Security Administration (SSA) with your new last name, if it has changed, or if both spouses hyphenate their last names after getting married. When newlyweds file a tax return using their new last names but don’t update their records with the SSA first, IRS computers can’t match the new name with the SSN on file causing the IRS to reject or return the tax return for correction. Refer to the SSA website for more information on how to update SSA records at www.ssa.gov.
- Change of Address: If you move, ensure you notify the IRS immediately of your new address so you may receive your refund and any IRS notices or letters at your new address. You can change your address when you file your Federal Income Tax Return, or if you have already filed your return, you may file IRS Form 8822, Change of Address.
- Adopted Children: If you adopted your spouse’s child(ren) after getting married, make sure each child has an SSN for any related tax benefit claimed on a tax return. Refer to the SSA website on obtaining an SSN. The following IRS Publications are good resources for tax credits for dependents and rules for children and dependents, IRS Publication 929, Tax Rules for Children and Dependents, IRS Publication 972, Child Tax Credit and IRS Publication 970, Tax Benefits for Education. You may also go to the IRS website for more information on any of these topics at www.irs.gov.
- Community Property States: If you live in a community property state and file married filing separately, you may need to allocate some of your income to your spouse and vice versa. The rules can get tricky. Refer to IRS Publication 555, Community Property for rules for filing a Federal Individual Income Tax Return in this situation.
- Home Exclusion Sales: If both spouses enter a marriage each owning a home and eventually sell one or both homes, you could each potentially claim a $250,000 gain exclusion on the sale of each home if you meet the ownership and residence rules. See IRS Publication 523, Selling Your Home for more information.
- Other general tax concerns for newlyweds are listed at Summer Newlyweds Should Also Think About Taxes.
The rules can be complicated when deciding the best way to file depending on each of your tax situations. If you have any questions about how to file, you may refer to the IRS website at or consult a tax professional.