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What does the IRS have to do with Valentine’s Day?
February 11, 2015 - Uncategorized
Love is in the air. People use this heart-filled time of year to profess their love, to get engaged, and to marry.
When you marry, you get to change your income tax filing status. You may also change your name. When you do change your name, be sure to include Social Security Administration in all the name-change notifications you make.
Did you know you are born with an income tax return filing status? We all start life as Single. Even is you are a twin, you are a Single taxpayer. Can a baby be a taxpayer? Well, did you ever hear of the Gerber Baby? The answer is “Yes.”
Your filing status is determined by your marital status on the last day of the calendar year. When you marry, and are married as of December 31st, you will generally choose Married Filing Jointly. What else could you choose? You could choose Married Filing Separately. You might qualify for Head of Household.
One of my clients asked, “You mean if I get married on December 31st, I am treated as I was married ALL YEAR?” And the answer to that question is YES. Maybe you want to marry on December 31st, but wait until after midnight to say “I DO!” and sign the license on January 1st. With planning, you can choose the year you begin your joint return.
One thing I want you all to know is, “When you marry the person, you marry their tax troubles, too.” So be sure you know all the facts and enter into this new partnership, this new joint venture, with your eyes open. When you file a joint tax return, your taxable income includes the worldwide income of both taxpayers.
On a tax return for two people legally married, one is the primary tax payer and the other is the secondary tax payer. This just means that the name listed first is referred to as primary and the name listed second is considered secondary. The terms husband and wife don’t always fit. The IRS may still use the terms taxpayer and spouse.
Another filing status is Qualifying Widow or Widower. Special tax rules come into play with each of these choices. Do you have a choice when choosing your filing status? What was your personal situation on December 31st?
Have you heard, “Things Change.”? How many times was Elizabeth Taylor married? Like Liz, you may find yourself returning to Single when the other filing status no longer applies to you. Are you making changes this year?