Tax Tips for June Weddings
Article Found on AccountingToday
In all the frenzy that goes into the June wedding season, the last thing and bride- or groomzilla is thinking about is their tax situation – but as Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting points out, there are a host of tax issues that kick in when you say, “I do.”
Luscombe suggested a number of areas where a tax practitioner’s expertise may be particularly useful to the newlyweds.
- Help them pick a filing status
Depending on the newlyweds’ financial situation, there may be pros and cons to filing jointly or separately.
- Spread the word on name changes
If either spouse’s name will change on the tax return, a matching change should be registered with the Social Security Administration.
- Help sort out their benefits
All sorts of employee benefits – most obviously health care insurance – are extended to spouses, which can mean making some complicated choices.
- Check their withholding
With the potential for a new filing status, new dependents, and maybe two income streams, it makes sense to review the newlyweds’ W-4 and check if they’re withholding too little or too much.
- Find some charitable deductions
Is the happy couple using a charitable organization’s facilities for their wedding or reception? Or are they donating any wedding leftovers?
- Did they get help paying for the wedding
Given how expensive weddings have become – the average event costs around $35,000, according to Wolters Kluwer – if parents or grandparents paid for expenses related to the special day, there may be gift tax issues.
- Be careful with promotional items
Extra items from the wedding vendors – a “free” tuxedo, extra flower arrangements, or the like – and other special deals may have tax consequences.
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