What you need to know and options for filing from a tax pro at AmeriTax & Accounting in Richland, Washington
And that tax pro is no other than one of the owners of Stone Ridge Estates Wedding Venue in Pasco, Washington, Stacey Miles! That's not news to all of you, but many of you don't know Stacey is also full time bookkeeper and tax preparer.
So let's dive right into the fun topic of taxes and marriage. Marriage can significantly impact your tax situation. While it's often celebrated for love and companionship, it also brings about changes in your financial life, including your taxes.
Here's a brief overview of the key tax adjustments that might occur after tying the knot.
1. Filing Status Options
Many newlyweds assume they only have the option to file jointly. That is not the case, there are two filing options:
Married Filing Jointly: This is the most common filing status for married couples. It allows you to combine your income and deductions, often leading to significant tax savings and credits.
Married Filing Separately: This option is less common but might be beneficial in certain situations, such as when one spouse has substantial debt or income that could impact the other's tax bracket. Some credits can be lost when filing separately. You do NOT need to be actually separated, you can still live with your spouse, to choose Married Filing Separately.
2. Deductions and Credits
Standard Deduction: The standard deduction is a fixed dollar amount you can deduct from your taxable income without itemizing your expenses. The amount varies depending on your filing status.
In 2024, the standard deduction is $14,600 for single filers and married persons filing separately and $29,200 for a married couple filing jointly.
Itemized Deductions: If your itemized deductions (such as mortgage interest, charitable contributions, and medical expenses) exceed the standard deduction, you can itemize them on your tax return.
Tax Credits: Tax credits directly reduce your tax liability. Some credits, like the Child Tax Credit or the Earned Income Tax Credit, as noted above, may be affected by your marital status.
3. Qualifying for Tax Benefits
Dependents: If you have children, your marital status can influence whether you qualify for certain tax benefits related to dependents, such as the Child Tax Credit.
Retirement Accounts: Contributions to retirement accounts like IRAs or 401(k)s may be subject to different rules depending on your filing status.
4. Community Property Laws
State-Specific Rules: Some states have community property laws that determine how assets acquired during marriage are owned. This can affect how property is taxed, especially in cases of divorce or death.
Washington State IS a community property state. If you are considering filing separately in a community property state I strongly urge you to seek a tax professional!
The nine states in the United States with community property laws are: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
It's important to note that tax laws can change frequently. To ensure you're taking advantage of all available deductions and credits, it's recommended to consult with a tax professional, or find resources on the Internal Revenue's Website.
Hope this blog helps you navigate your new tax filing status!
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