When you get married, you're not only combining homes, but possibly tax returns, as well. Will marriage save you money on your taxes, or will you be penalized with a tax bill for your nuptials? Follow these steps for the lowest possible taxes as a wedded couple.
SEE: The Tax Benefits Of Having A Spouse
Can You File as a Married Couple?
If you weren't married on the last day of the tax year for which you are filing, you can't declare yourself either married filing jointly or married filing separately. You will likely both declare yourselves as single individuals. Thus, if you were hitched on January 1, 2012, you can't declare yourself married on your tax returns for the 2011 tax year.
Review Restrictions on Married Filing Separately
There are two restrictions on filing separately that could automatically end discussions regarding these options, or have you thinking harder about which tax option to choose.
- Prohibited Deductions and Credits
If you file as married filed separately, you cannot claim student loan interest deductions, tuition and fees deduction, the education credits and earned income credits. If you qualify for more than one of these credits and deductions, it's possible you could lose more than a thousand dollars of your refund by filing separately.
- Living in a Community Property State
If you live in Arizona, California, Idaho, Louisiana, Nevada, New, Mexico, Texas, Washington or Wisconsin, you will have to deal with a whole set of complicated rules to decide what is considered community or marital income and what is considered your income. And the rules can vary by state. Your combined income could be split equally between the tax returns, and negate the purpose of filing separately. If you plan to file married filing separately, it would be wise to use tax software or hire an accountant.
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