Tax implications after recent marriage

[wcamuso]

I got married earlier this year and my wife and I were wondering what are the advantages/disadvantages of filing jointly versus separately? Is there anything that we should be doing now in advance of our first tax return as a married couple? Also, do we need to claim our wedding gifts on our tax returns? 

[xmasbaby0]

Best Wishes!  No, gifts are not taxable; you do not enter wedding gifts on a tax return.

If you were legally married at the end of 2023 your filing choices are married filing jointly or married filing separately.

Married Filing Jointly is usually better, even if one spouse had little or no income. When you file a joint return, you and your spouse will get the married filing jointly standard deduction of $27,700 (+$1500 for each spouse 65 or older)  You are eligible for more credits including education credits, earned income credit, child and dependent care credit, and a larger income limit to receive the child tax credit. 

If you choose to file married filing separately, both spouses have to file the same way—either you both itemize or you both use standard deduction. Your tax rate will be higher than on a joint return. Some of the special rules for filing separately include: you cannot get earned income credit, education credits, adoption credits, or deductions for student loan interest. A higher percent of your Social Security benefits may be taxable. Your limit for SALT (state and local taxes and sales tax) will be only $5000 per spouse. In many cases you will not be able to take the child and dependent care credit. The amount you can contribute to a retirement account will be affected. If you live in a community property state, you will be required to provide additional information regarding your spouse’s income. ( Community property states:  AZ, CA, ID, LA, NV, NM, TX, WA, WI)

 If  you are using online TurboTax to prepare your returns, you will need to prepare two separate returns and pay twice.

https://ttlc.intuit.com/questions/1894449-married-filing-jointly-vs-married-filing-separately

https://ttlc.intuit.com/questions/1901162-married-filing-separately-in-community-property-states

https://ttlc.intuit.com/questions/1894449-is-it-better-for-a-married-couple-to-file-jointly-or-separ...

[ElizabethW2]

Congratulations!

And kudos for thinking about the tax implications in plenty of time to prepare before year-end!

First, it is recommended that, if you're employees, you update your Form W4 Withholding Allowances with your employer(s).

Being married gives you the choice of filing a joint or separate returns.  If you have children, this will be an important decision as some of the dependent related credits are limited when filing separately.  If you don't have children it comes down to which filing status is best for you.  I encourage you look at both a joint return and separate returns to be sure which gives you the smaller tax obligation.

Here is a link to an article on our support site that covers all the aspects for newlyweds:  https://turbotax.intuit.com/tax-tips/marriage/getting-married/L0DvEUlEC

No, gifts are not taxable to the person receiving the gift ... enjoy!

I hope you find this information helpful.  If so, please say 'Thanks' by clicking the thub icon below.  

Elizabeth W., EA