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Shower tax tidings on June brides and grooms

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in Small Business Tax

Is your daughter or son marrying soon? You’ll probably lose a tax exemption when your child marches down the aisle, but that doesn’t mean the happy couple has to suffer, tax-wise.

Advice: Make sure the newlyweds complete all the tax paperwork associated with a marriage, including:

• Reporting name changes to the Social Security Administration (SSA), which will mail out a Social Security card with the new name on it. That way, the name will be linked to the Social Security number on the couple’s tax return.

• Reporting address changes to the IRS. The couple should use IRS Form 8822. Access it at /f8822.pdf.

• Adjust their W-4 withholding allowances to reflect their new marital status. Generally, the switch to joint filers will lower their collective tax bill. Tip: Under the annual gift-tax exclusion, you can give each newlywed a $12,000 gift tax-free in 2006. You and your spouse can jointly give a whopping $48,000 to the newlyweds without paying any gift tax ($24,000 to each person).

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