A wedding-planning to-do list can seem a mile long sometimes, and the last thing a busy bride wants to do is add to it. But keeping on top of your finances as tax season approaches is incredibly important, for both your wedding budget and your post-wedding financial plans.
So why should you add "Talk about our taxes" to all of the other tasks you need to accomplish before your wedding day rolls around? Lisa Greene-Lewis, a TurboTax tax expert, is here to fill us in about everything from figuring out whether parts of your wedding are tax-deductible (yay!) to deciding whether to file jointly. Taxes may not be the most romantic of topics, but having a little extra cash in your bank account (and a stress-free tax season!) totally is.
Could Part of Your Wedding be Tax Deductible?
The short answer: yes! Depending on the choices you've made as you've planned, you may be able to get a tax deduction for some of your wedding expenses.
- Your Dress, Flowers, and Food
Sorry, buying your dress won't get you a tax deductionвЂ¦ but donating it will! "You can donate these items, including leftover flowers or food, to local organizations and deduct them as a charitable contribution," says Greene-Lewis. "Just remember: if the value of one single item (like your wedding dress or the total value of the flowers you donated) is more than $5,000, you will need to get an appraisal in writing to include with your tax filing."
- Your Wedding Venue
"Where you get married may mean the venue payment could be tax-deductible," says Greene-Lewis. If you chose a nonprofit venue, like a church, state park, or local museum, that deposit could be considered a charitable donation, as well.
- Your Gifts and Favors
Not only will making donations in your guests' names do some good, but it will also get you a tax break, too! "If you give any generous donations during and after your wedding planning, make sure to track them all," advises Greene-Lewis. A handy way to keep it all organized is TurboTax's ItsDeductible tool and app, which will help you track donations on the go.
Before you file your taxes, make sure you've gone over these key points. They'll save you some major headaches and make sure you've got it all right.
- Check Your Tax Withholding
"The first item on your to-do list should be adjusting your tax withholding with your employer," Greene-Lewis explains. "When you are newly married, your income-tax liability will change depending on your spouse's income. It can be higher or lower, and adjusting your withholding will ensure you don't over- or underpay your taxes."
- Choose the Best Filing Status for You and Your Spouse
Generally, couples who file jointly may be able to take advantage of what is known as the "marriage bonus," since tax rates are typically lower for couples filing jointly than for those filing separately. "When you file jointly, you're able to claim more tax deductions and credits together, like the Lifetime Learning Credit, worth up to $2,000, or the Earned Income Tax Credit, which can be up to $6,269 if you are a married couple with three or more kids," says Greene-Lewis. "On the other hand, some married couples who earn higher incomes may see a "marriage penalty" if they have high dual incomes, which may bump them up into a higher tax bracket." For instance, married taxpayers whose adjusted gross income exceeds about $311,000 will start to see limitations on their itemized deductions.
- Consider Itemizing Deductions
"It may make sense for you as a married couple to claim itemized deductions rather than the standard deduction," Greene-Lewis explains. "Some of the most common itemized deductions that really bump up married couples' tax deductions include home mortgage interest, property taxes, charitable contributions, and medical expenses."
- Keep an Eye Out for More Tax Deductions and Credits
Many tax deductions and credits require you to file as married filing jointly, not married filing separately, in order to even get them. "Those deductions include the Earned Income Tax Credit, Child and Dependent Care Credit, and educational tax benefits," says Greene-Lewis.
- Think About a Spousal IRA
If your spouse doesn't work, you can still contribute to an individual retirement account known as a Spousal IRA. "The requirements for a Spousal IRA include being married and filing with the status of married filing jointly," says Greene-Lewis."It's important to remember that the combined contributions for you and your spouse cannot exceed the taxable compensation reported on your tax return."
How Can a Name-Change Impact Tax Filing?
If you've changed your name after your marriage, there's an important step to take before filling out those tax forms.
"According to the IRS, if you've changed your name (including taking a hyphenated name) and the name on your tax return doesn't match what the Social Security office has on file, then you may experience delays in getting your taxes processed," says Greene-Lewis. But thankfully, it's easy to take care of if you're changing your name legally as well as socially.
"To make a legal name change, you need to have your name updated with the Social Security Administration," Greene-Lewis explains. "Fill out the application for a Social Security Card (Form SS-5) and submit it in person at either the local U.S. Social Security office or the U.S. Embassy. You will also need a copy of your marriage license as proof of your legal name change." Once your Social Security card has been updated, your new legal name will be on record with the IRS, as it's linked to your Social Security number. Just be sure to use the exact same name when filing your taxes!