Essential Tax Tips for Marriage Status Changes

When it comes to taxes, a major life change like getting married or divorced can have a significant impact. The IRS determines a taxpayer’s filing status based on their marital status as of December 31 of the tax year. That means your marital status on the last day of 2024 will determine your filing options for the entire year. To help taxpayers navigate these changes, the IRS has released some helpful tips and tricks.

Here’s a breakdown of essential tax tips for those experiencing a change in marital status in 2024:

1. Understand How Marriage Status Affects Taxes

The IRS generally considers taxpayers as married if they are separated but not legally separated or divorced by the end of the year. Your marital status affects critical aspects of your tax filing, including:

• Filing Requirements: Different filing statuses have specific thresholds for income and deductions.

• Standard Deductions: Married couples may qualify for a higher standard deduction if filing jointly.

• Eligibility for Tax Credits: Filing status can impact eligibility for credits like the Earned Income Tax Credit (EITC) or Child Tax Credit (CTC).

  
  

2. Notify the IRS and Others of an Address Change

If your marital status includes a move, don’t forget to update your address with key organizations:

• U.S. Postal Service (USPS): Forwarding your mail ensures you don’t miss important documents.

• Employers: Notify your employer to update your records for year-end tax forms like the W-2.

• IRS: Taxpayers can inform the IRS of an address change using Form 8822 or by writing a letter. For more details, visit the IRS website.

  
  

3. Adjust Your Withholding

Marriage or divorce can significantly affect your tax liability, so it’s essential to review and adjust your withholding. Here’s how:

• Use the IRS Tax Withholding Estimator to determine how much tax should be withheld from your paycheck.

• Submit a new Form W-4, Employee’s Withholding Certificate, to your employer. This ensures your withholding reflects your new filing status.

• If eligible, you may opt for exempt status on Form W-4 if you had no tax liability in the previous year and expect none in the current year.

Taking these steps early can help avoid surprises at tax time.

4. Review Your Filing Status Options

For newly married couples, choosing the correct filing status is key. Married taxpayers have two primary options:

• Married Filing Jointly: Typically allows for a higher standard deduction and access to more tax credits. However, both spouses’ incomes and deductions are combined, which may result in a higher tax bracket.

• Married Filing Separately: Might be beneficial if one spouse has significant medical expenses, student loan interest, or other itemized deductions tied to income. Note that some credits, like the EITC, are unavailable when filing separately.

It’s a good idea to calculate taxes both ways to determine which option is most beneficial for your situation.

5. Consider Professional Guidance

Tax laws and requirements can be complex, especially when your marital status changes. A tax professional can:

• Help you understand how your specific situation affects your taxes.

• Identify opportunities to minimize your tax liability.

• Assist with filing forms and documents accurately and on time.

Working with an expert ensures that you’re making the most of the available deductions and credits while avoiding common mistakes.

Changing your marital status is a significant life event that requires attention to tax details. From updating your name and address to revisiting your withholding and filing status, taking proactive steps can save you time, money, and stress when it’s time to file your taxes.