Your Marriage and Taxes

Marriage is the ultimate merger of sorts. You and your partner are making the official commitment to a lifetime of sharing. Logistically, it means blending two people's lives into one home. This may include different possessions and styles - you may have antiques; he has Danish nouveau. Oftentimes, it means combining pets, families and finances.

In the case of finances, you may decide to share all accounts, none at all, or create one just for the household. But marriage will definitely have a legal and tax effect on your finances, whether they're in the form of personal property, assets, debts, retirement accounts or savings.

While your marriage could bring an increased standard of living, due to combined incomes and assets, there are some financial and tax issues as a result of your tying the knot. Here are some important points to consider if you've recently been married or are planning to be sometime soon:

Your IRS Filing Status
You have a choice on this one: either "married filing jointly" or "married filing separately." The best choice is the one that works to your advantage tax-wise. It's a bit tricky, so it's smart to consult with a tax professional for advice on this one, particularly the first year you're married.

Your Retirement Accounts
If your income meets the criteria, each of you can claim an IRA deduction of up to $3,000 on your 2003 return. To do this, you and your spouse must have combined earnings of at least $6,000 and modified adjusted gross income of $60,000 or less. For couples where a larger income disparity exists, the non-working or low earning spouse can "borrow" compensation from his or her spouse in order to reach the maximum contribution limit.

Also, make sure your employers know to change your filing status on your respective 401(k) accounts.

Your Social Security Number
Your social security number of course stays the same regardless of your marital or filing status. But if you do change your name, you should apply for a new social security card in your new name. (This process can be done only through the Social Security office.) If your name and number don't match, you may see a delay in the processing of your tax return and any refunds that are due to you.

One Home
Although it's not required, you might want to inform the IRS of your new address. It's better than counting on your mail being automatically forwarded to you based on the change of address form you filed at the post office. That process can result in delays in refunds and any correspondence with the IRS. To change your address, file an IRS Form 8822.

Generally speaking, sorting out your taxes as a married couple shouldn't be too difficult. If you have questions, check with your tax professional for more information.