Will Your Newlywed Status Affect Your 2019 Taxes?
If your wedding took place in 2018, you'll want to read this before filing your taxes this year.
There are a lot of things you probably already know going into this tax season-like how you will need to use whatever name is on file with the Social Security Administration at the time you file, which may not necessarily be your married name yet-but there may be some changes that took place that will affect how you file your first income tax return as a newlywed. To understand the ins and outs, we talked to accountant Clarissa Makhoul of Makhoul Financial Services about what you can expect when filing your taxes this year. Here, she shares that information, plus offers tips for making your first time filing together a little bit easier.
Is there a difference between filing as a married person and a single person in 2019?
Many taxpayers may notice that their tax liability is slightly higher than it was when they used to file as a single taxpayer. This is usually are result of a couple's combined earnings being high enough to phase out credits that they were previously eligible to receive, not due to changes in tax law. "Beginning in 2018 the personal exemption is no longer a deduction," Makhoul explains.
Are there any new marriage related rebates or deductions that newlyweds can use this year?
While there aren't any tax breaks for married filers, the standard deduction is higher than it is for single filers. For tax year 2018 married couples have a $24,000 deduction as opposed to their single counterparts who are limited to $12,000.
Do you have to pay taxes on your 2018 wedding gifts?
The good news is that you do not have to pay taxes on any monetary gifts you received on your wedding day. The bad news is that you cannot write off most of your major wedding-related expenses. "There are a couple ways you may be able to deduct a portion of wedding expenses. Fees paid to churches or nonprofit organizations for ceremony fees may be considered a charitable donation," says Makhoul. You will want to check with the organization before taking this deduction. The same goes for any leftover food you give to shelters or if you donate your wedding dress. Just make sure you have a receipt from the organization you donated to.
Are there any benefits to filing your taxes separately this year?
There are several reasons to consider filing separately, but there will be restrictions on the credits that can be claimed, and your tax rates will be higher. That is not to say that it is always a bad idea. "There are situations when filing separately will be advantageous, but each circumstance is unique. I would recommend consulting with a tax professional to assist in making this decision," adds Makhoul.