If you got married on or before December 31 of last year, then you and your spouse will have to do your taxes a little bit differently this year. Keep reading to learn some of the top ways that getting married affects your taxes.
Now that you’re married you can no longer file with a single status. You either have to choose Married Filing Jointly or Married Filing Separately. For the majority of married couples, Married Filing Jointly is more beneficial than Married Filing Separately. The latter status usually gives you access to more beneficial deductions and credits.
Your tax bracket determines the tax rate that you will be responsible for. It’s likely that your tax bracket will change now that you’re no longer filing as single. Couples who file jointly often face a higher tax bracket since their incomes are combined.
Exemptions and Standard Deduction
Married couples get to claim two exemptions instead of the one that single individuals get to claim. The standard deduction is highest for married couples who file jointly. This year the standard deduction is $12,600 for joint filers and $6,300 for married couples who file separately. The standard deduction is subtracted from your income that you are taxed on. Therefore, the higher the standard deduction the better.
After getting married it’s usually a good idea to change your W-4. Whenever you start a new job you are required to fill out Form W-4. The form tells your employer who how tax to withhold. Changing your status to married might lessen the amount of taxes you have to pay. The IRS provides a helpful withholding calculator that you can use to determine whether you should fill out a new W-4.
A number of married couples buy their first home as a result of their combined incomes. The mortgage interest that you pay can be deducted from your taxes if it is itemized. If the two of you already own a home, lived in it for two years, and sell it while married, you can exclude up to $500,000 of the money you made on the sale. Read this article to learn more.
Standard Deduction or Itemizing?
Depending on your financial situation it might be better to itemize rather than claim the standard deduction. Most married couples who own a home find it more beneficial to itemize since itemization allows deductions for mortgage interest. Every married couple’s situation is different, so it might be a good idea to speak with a tax professional when deciding on which option you should choose. To learn more take a look at this article.