Is your son or daughter getting married this fall? Even though you might be losing a personal tax exemption, your child may benefit from filing a joint tax return with his or her spouse. The “marriage penalty” often doesn’t apply to newlyweds who recently graduated.
Tip: The couple can elect to file separate returns if it will be more beneficial to them overall.
Alert: Make sure that they complete all the necessary tax paperwork. Here are a few examples.
- Report a name change to the Social Security Administration (SSA), which will provide a Social Security card with the new name. This way, the number will be linked to the Social Security number on the young couple’s tax return.
- Report an address change to the IRS. The couple should use Form 8822, Change of Address for this purpose.
- Adjust withholding allowances on Form W-4 to reflect their new marital status. If the couple expects to owe less tax, they can reduce withholding. Conversely, the newlyweds might increase withholding if they expect to pay more tax.
Finally, remember that you can give gifts to your children that are sheltered by the annual gift tax exclusion. You and your spouse can together give a total of $56,000 (2 × $28,000) tax-free to the bride and groom combined.
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