Getting married is a major life milestone that brings excitement, love and new responsibilities—including changes to your taxes. Marriage can impact how you file your tax return, what deductions you qualify for, and even your overall tax liability.
Whether you’re tying the knot or a newlywed, understanding the tax implications of your union can help you make smart financial decisions. From choosing the right filing status to taking advantage of tax breaks for couples, navigating taxes as a married couple doesn’t have to be complicated. Here’s what you need to know to get started.
Filing Status
Your filing status is determined by your marital status as of December 31 of the tax year. There are two statuses to choose from:
• Married Filing Jointly (MFJ): This is the most common status and often reflects a lower liability, based on the joint incomes and deductions.
• Married Filing Separately (MFS): This status is used in various situations related to one spouse’s tax debt obligations, and significant differences in income. It should be noted that the tax liability for MFS may be higher than the joint status since the tax bracket is based closely on the single filing status.
Impact on Standard & Itemized Deductions
Utilizing the standard or itemized deductions can lower your liabilities. Changing your filing status can drastically change which option you choose. The standard deduction is increased annually per inflation, and is different for each filing status. The amounts for 2024 are:
• Single: $14,600
• Married Filing Joint: $29,200
• Married Filing Separate: $14,600
• Head of Household: $21,900
The most common itemized deductions include:
• Mortgage interest and property taxes
• Medical expense (total costs must exceed 7.5% of your adjusted gross income calculated after considering certain deductions)
• Charitable contributions (must be a charitable organization, and detailed support is required for the deduction—date of donation, recipient name and donation amount
Note: The standard deduction has increased significantly over the last few years and can be beneficial to joint filers when the itemized deductions are lower.
Selling a Home
Often, when couples marry, one or both spouses may need to sell their home in order to buy a new one together. In the past, any profit from the sale (when proceeds exceeded the purchase price) was considered taxable income. However, current tax rules provide relief: individuals can exclude up to $250,000 of the gain from taxation, and joint filers can exclude up to $500,000.
Impact on Tax Credits
Unlike deductions, tax credits reduce taxes dollar for dollar. Common tax credits include child tax credit, child and dependent care credit, earned income credit (based on income thresholds), energy saving home improvements and educational expenses. These credits can be limited by the combining of both your incomes.
Other Considerations
Name changes: Make sure to file the return matching the Social Security number until you officially change your name
Update the W4 with your employer: It is advised to make sure to change the filing status on the W4. However, it has been found that the MFJ status tends to under deduct for withholding to allow more income to taxpayers during the year. Because of this, many have discovered they owe come April 15. To check your withholdings, use your pay stub from June, take your YTD federal withholdings and divide by the gross wage, determine the percentage being deducted and match it to your tax bracket on the most recently filed return.
Update financial accounts and beneficiaries: Consider updating brokerage, retirement plans and insurance policies to include your spouse
Health insurance: Whether you have medical insurance through your employer or the healthcare marketplace, reevaluation of the health plans to include your spouse may save money on premiums and if you have marketplace insurance, the change may impact the premium tax credits.
Major life changes like marriage can introduce new complexities that a professional can help you navigate. It is strongly advised to consult a professional. After the 2024 tax return is prepared, strategic planning for the 2025 tax year can be beneficial and offer savings.
As you begin a new life together, keeping up to date with tax code changes and how those changes may impact your taxes will provide a smoother transition and less surprises at tax time.
Nicole Gillyard (Freeman-Kirkland), CPA, is the CEO and founder of By The Numberz CPA in Atlanta. With extensive experience in accounting and financial planning, Gillyard specializes in helping individuals and businesses navigate complex tax and financial strategies.