Newly married couples may have access to a variety of tax breaks depending on whether they file jointly or separately, as these tax tips will reveal. Enjoy your wedded bliss even more with the help of this video on tax basics.
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Hello, I'm Sara from TurboTax with some important information for newlyweds.
Did you just get married this year? If so, I'm sure that taxes are the last thing on your mind. However, your new status can bring you lots of tax savings--perhaps even enough to pay for your recent honeymoon.
The first thing you and your spouse must decide on is whether to file as married, filing jointly, or filing separately. In most cases, filing a joint return with your spouse will save you the most in taxes. For example, suppose you and your spouse filed separate returns for 2010. And you have $82,000 of taxable income and your spouse has $10,000. By filing separate together you will owe $18,174 on the combined $92,000 in income. However, if you file jointly you'll only pay $15,369. This is because the IRS views each spouse as earning half the income which essentially keeps more income and lower tax brackets. Because of the lower tax brackets you and your spouse will enjoy, it maybe a good idea to evaluate whether either of you should reduce the amount withheld from your paychecks. This will make your tax refund smaller but it will put more money in your paychecks throughout the year.
Another great benefit of filing jointly is the increase in the amount of taxable gain you can exclude when you sell your home. That number goes from $250,000 to $500,000. This could offer tremendous savings in the future if you decide to move, especially if your home significantly appreciates in value. For more tax tips and guidance, visit TurboTax.com.