Getting married is a process. Yes, it’s beautiful, magical, and a cause for celebration, of course. But at the core of a marriage, you’re taking two lives and pulling them together as one.
Along with the non-stop smiling and joyful switch to referring to each other as “husband” or “wife,” there are weightier implications for things like your living situation, personal financial management, long-term goal planning, and yes, even taxes.
For years I’ve heard people say that one of the significant benefits of getting married is filing taxes jointly. So going into tax season 2020 with a wedding band and a new last name (more on that later), I thought we were in for a massive refund.
Essentially I pictured the IRS raining down hundred dollar bills and champagne on our household.
Let’s just say that wasn’t the case.
Your tax situation will change after getting married. And there are certain benefits. But in my experience, it wasn’t the dramatic miracle windfall I’d been hoping for.
In this article, we’ll cover:
For most couples, getting married isn’t going to affect your taxes in a life-altering way. But some changes might result in a slightly larger refund than you’ve been used to filing alone. Here’s what changes tax-wise after you tie the knot.
1. Your Filing Status
If you’re married as of December 31, you’ll be expected to file as such for that year’s taxes. Married couples are given two choices in filing status: married filing jointly and married filing separately.
For most married couples, filing jointly is the best bet unless you fall into one of these unique circumstances.
- One spouse has a high income, and the other has many deductions or medical expenses
- You’re planning a separation or divorce
- One spouse suspects tax fraud or evasion
But if you’re newly or happily married and you don’t fall into any of those situations, you’re likely going to choose to file jointly and reap the benefits of that status. That includes:
- The ability to take certain deductions and tax credits: This includes student loan interest, childcare expenses, educational expenses, credit for adoption expenses, and earned income tax credit if income allows.
- A higher standard deduction: For the tax year 2020, the standard deduction for married couples filing jointly is $24,800. Compare that to $12,400 for married couples filing separately.
If you’re on the fence about which option might suit your situation, you can consult a tax professional or run your taxes both ways and see which will result in more significant savings. My husband and I asked our accountant to run things both ways. And married filing jointly returned as the best option for us, as it likely will for many others.
2. Your Tax Bracket (maybe)
Married couples filing jointly combine their income. That means you may potentially change tax brackets, depending on what your spouse makes and if your income changed.
One of you may have been in the lowest tax bracket when you filed alone, but coupled with a high-earning spouse, you may now be subject to pay into a higher bracket. On the contrary, a high-earner now paired with someone with limited income could benefit from shifting into a lower tax bracket.
If you’re not sure which tax bracket you might fall into, here are the brackets for 2021. Remember that brackets are staggered, so the first $9,950 of your income for single filers is taxed at 10%. Then whatever you make up to $40,525 is taxed at 22% and so on. So for someone in the highest tax bracket, not all of their income is taxed at 37%.
- 37% for single filers with income greater than $523,600 ($628,300 for married couples filing jointly)
- 35% for single filers with income greater than $209,425 ($418,850 for married couples filing jointly)
- 32% for single filers with income greater than $164,925 ($329,850 for married couples filing jointly)
- 24% for single filers with income greater than $86,375 ($172,750 for married couples filing jointly)
- 22% for single filers with income greater than $40,525 ($81,050 for married couples filing jointly)
- 12% for single filers with income greater than $9,950 ($19,900 for married couples filing jointly)
- 10% for single filers with income of $9,950 or less ($19,900 for married couples filing jointly)
Serendipitously, my income changed dramatically the same year we were married. Had I kept my high-income job, I would’ve dragged my husband into a higher tax bracket against his will.
3. Higher Tax Avoidance on Home Sale
If either partner plans to sell a home after the big day, there are changes to how much profit you can exclude from taxes. As long as you’re married filing jointly and one of you owned and lived at a residence for 2 of the last 5 years, the amount of non-taxable profit when you sell increases from the single rate of $250,000 to $500,000. That means a home you sold for $600,000 in profit would only be taxable on $100,000 as opposed to $350,000 if you had sold it before getting married.
4. Gifts and Estate Planning
Married couples also have slightly different implications for gift taxes and long-term estate planning. A married couple can give up to $30,000 in gifts to another person each year without triggering the need to file a tax form. That’s double the $15,000 available to be gifted by a single filer.
But what’s noteworthy when it comes to gifting is that there is no limit on what transfers between spouses (as long as your spouse is a US citizen). That goes for bypassing the gift tax while you’re alive and also estate taxes after you pass.
Those are just some of the high notes of how taxes change after getting married. To be sure you’re capturing all the benefits of the transition, you may want to consult a tax professional or use a tool like TurboTax that can guide you in the right direction. Now you know what to expect with taxes, let’s dive into another of the joys of getting married, changing your last name.
As a woman who chose to take my husband’s last name, I’d heard about the horrors of the name change process. Some of my friends and women I knew put off changing their names for years and years because of the hassle. Needless to say, I was hesitant to even consider doing it myself.
With companies like HitchSwitch and NewlyNamed popping up, I seriously considered letting someone else help me with the paperwork. But when I actually started to research (and by that, I mean plugging in “name change in South Carolina” into google), it seemed far more straightforward than people were making it out to be.
The name change process looks a little like this.
- Get married: This part might be obvious, but you do need to get married and file for a marriage certificate in the city of your nuptials before you can legally change your name. Once you turn in the papers, make sure to request a few certified copies, which may run you a few bucks each and varies by state (I got 5 to be on the safe side at a nominal $3 each).
- Change your name at the Social Security Administration (SSA): I think this is the part of the process everyone dreads. But as long as you’re prepared with a certified copy of your marriage license, valid ID like a driver’s license, passport, or birth certificate, and completed SSA form, the process really isn’t bad. My SSA trip took less than an hour, including the wait. And my new social security card arrived in the mail a few weeks later. The good news is your social security number won’t change, only the name attached to it.
- Get a new driver’s license at the DMV: After you change your name at SSA, you’ll want to update your driver’s license. You can wait until you have your new social security card or take the paperwork from SSA to prove your name change. Again, if you research what your state requires for a name change at the DMV and follow the instructions to a T, you shouldn’t have any issues.
- Notify your employer: The company that provides your W-2 needs to have your name change on file as soon as you’ve changed it with SSA. Doing so ensures your tax forms will be sent with the correct information.
- Change your name everywhere else: I’m not gonna lie, this part kind of sucks. I tried to make a list of all of my accounts to update, but I’m still getting digital and physical mail over a year later for straggler accounts I forgot about. Make sure you hit major ones like your passport, banks, credit card companies, loan companies, or any other interested party who may be paying you or whom you may owe money.
How Will a Name Change Impact Taxes?
There aren’t really any tax implications of the actual name change process. The only caveat is that you need to change your name everywhere to make sure everything matches. That specifically applies to any entity that might send you a tax form, i.e., your mortgage or student loan company, if you intend to write off the interest.
Suppose you file taxes with your married name, but you’ve failed to change the name with your employer that sends your W-2 or the Social Security Administration. In that case, it could mean your tax return will be delayed, pending your updated information.
I was married in February and processed my name change in March at the SSA, DMV, and my employer. Everything was wrapped up by April, and when we filed our taxes the following year, we received our refund quickly. As long as you change your name with all of the parties that might be sending you tax forms, you shouldn’t run into any issues.
The Bottom Line
Taxes and changing your name are facts of life if you’re getting married and want to take a new last name. But the process of filing taxes or a name change doesn’t have to be unapproachable. Be sure to:
- Consider whether it’s more beneficial to file taxes jointly or separately.
- Review all available deductions and credits for married couples as you file.
- Change your name with any organization that might send you tax forms, and do so by the end of the year you’re married to avoid delays.
That might seem like a lot, but it’s really just part of growing up and taking this giant step in your life. As long as you keep organized and try not to do everything all at once, you’ll come out the other side, married and hopefully with your happily ever after still intact.
- The Ultimate Guide to Filing Your Taxes In 2021
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- Tips to Save Money on Taxes