Nothing can put a damper on the fresh feeling of a new year—or a new marriage—quite like realizing we're in tax season. But don't fret; Being prepared with both information and paperwork can make all the difference in stress levels.
For all those newlyweds who tied the knot in 2018, your marital status isn't the only ting that's changed—how you'll file your taxes has changed too.
To help navigate the filing process and have you feeling a bit more empowered this tax season, BRIDES spoke with Ryan Mitchell, EA, of Hoboken Tax for his expert advice.
Your Filing Status
First things first, Mitchell reiterates, "Your first year of marriage will change your tax filing status. Usually, this change will bring about good things to your joint tax return." But, he warns, it's only if both partners fully understand one another's financial situation.
Mitchell says that filing jointly is more often than not the best filing status due to the increased standard deduction—which this year is $24,000. (Though working together with your tax professional will help you determine the best filing status for sure.)
Changes You May Feel
With marriage comes changes—and your taxes are certainly no exception.
For example, if you've paid student loan interest in prior years and received a deduction because if it, the good news is now your joint income has increased. The bad news? You might now be under a new threshold deeming you ineligible.
Additionally, you may opt to change your income withholding at work. Discuss this with your tax professional, as you may need to make changes to your Form W04, such as claiming an addition allowance or changing to a "married" rate, where less money will be withheld each check.
If You Bought a Home
"Getting married and buying a house is a wonderful experience," says Mitchell. But this too has tax implications when it comes to income taxes and mortgage interest paid.
You can claim your property taxes, but just keep in mind that they "are going to be capped at $10,000, which includes the state income taxes that you paid." Mitchell also explains that the interest you can claim on a home "is capped on mortgages that are up to $750,000."
For Your Appointment
It's incredibly important to be organized and prepared for your tax appointment. Prior to heading to your accountant's office, have an open conversation with your partner about your income, investments and prior year returns. Bring any tax related documents that you may have received in the mail with you, such as earnings statements, miscellaneous income forms, interest forms, income tax payments, student loan payments, and any expenses you believe to be tax deductible.
Mitchell also recommends: "When you see your accountant for the first time, please both take the time to meet them in person. If you cannot meet in person, then at least have a conference call, so that you are both comfortable with them."
Familiarizing yourself with the 2018 tax brackets can also help you have a better understanding of your federal income tax. This knowledge also equips you to make informed decisions about income withholding, too. For example, for married couples filing jointly, the rate at which your taxed increases when your combined incomes amount to over $77,400 and again at $165,000.
Income taxes are unavoidable, but the process of filing them as a married couple doesn't have to be entirely unpleasant. By being prepared, knowledgeable and organized, you can nail your first married tax season—and be even more prepared for the next!