It started with “I Do.” Then a kiss. Some cheering. I remember a cake. Then all of a sudden it was April and we were stressed out about our first income tax season as newly weds.
Depending on who you talk to, getting married is either the best thing you can ever do or the worst thing you can ever do with your life.
Newlyweds get all sorts of advice about how to navigate the unfamiliar terrain of married life. There are millions of relationship counsellors, advisors, talk shows and books about how to act within a marriage. Rarely if ever, do they get advice on how married people should approach the issue of taxation.
Why? Probably because taxation is not the most interesting topic in the world to a newlywed. No blushing bride will swoon at the idea of her and her husband sitting down around a table over a hot cup of cocoa, gazing lovingly into each other’s eyes as they do their taxes. Nothing turns marital bliss into marital blandness faster than number crunching.
Using an accountant at this time can really improve your finances and your marriage. An accountant is a lot like a therapist for your taxes. They let you know what financial decisions you are making that could be increasing your tax liability as well as what you could do to increase your tax return. The old adage goes that there are only two things that are certain in life; death and taxes. The tax system is so ingrained in our daily life that almost every meaningful decision you make has either a positive or a negative tax implication.
Many tax audit firms have implemented taxation software that help you determine your tax return based on your income and other personal information. Despite this, it is still easy to get confused with all different tax codes and you may inadvertently omit pertinent information due to lack of clarity. Your accountant can help newly married couples understand the tax codes that pertain to them so that they make the right tax decisions. Using a tax accountant should not only be a decision for newlyweds. Couples who have been married for several years can also reap massive benefits by using a chartered accountant. Here are a few of them.
Loaded With Useful Information
When it comes to taxes, the government treats married couples differently than it does single people. If you got married this year, your tax status changes to married for the duration of the entire year rather than from the date you said ‘I do.’ If you are filing jointly, this can be either positive or negative based on your spouses tax liability. You are also equally responsible for the information your spouse provides to the revenue authority whether or not it is accurate. Though this information sounds rather obvious, you would be surprised by the number of couples who find themselves in hot water because they simply didn’t know about these stipulations. Using an accredited accountant can help you avoid these pitfalls.
To Maximize Your Tax Return
Married couples have some advantages over their single counterparts during tax time. Some advantages, such as married couples filing a joint tax return get a larger standard deduction that is almost double that of single taxpayers are rather obvious. Other advantages are more subtle and can easily be missed if you don’t have an experienced accountant to help you. Married couples are also privy to tax credits that their single counterparts only dream of. Unlike single taxpayers, married couples have greater options of filing that can improve their tax returns. An accounting professional helps married couples make the best tax filing decisions based on the couple’s lifestyle. This information ranges from what tax implications exist for married homeowners, married couples with children and even couples who buy a brand new car. The accountant can also give you advice on what to do this year that will have a positive impact on your taxes next year. This is especially useful because most people forget about taxes as soon as they submit their annual tax forms until the next tax season.
To Minimize Your Tax Liabilities
If by filing jointly your combined annual income pushes you to a higher tax bracket, you may be subject to higher taxes. Before you start thinking of your spouse as a tax liability, consider using an accountant. They will advise you on how to legally reduce your taxes caused by this marriage penalty so that your spouse will once again be a loving and supporting partner in your view and not the the guy or gal that makes you pay more money to the IRS. Don’t you just love the government phrase “marriage penalty”?
To Help You Plan For Retirement
LISTEN to this. How you spend your sunset years largely depends on the financial decisions you made during your working life. It also depends on your spending and savings habits. Your tax accountant can help you make sound decisions on how to invest in your Individual Retirement Account (IRA). What most married couples do not know is even if you are the only spouse that is employed, you can still contribute to your IRA account. These contributions are tax deductible and can contribute towards a sizeable tax return.
How To Reduce The Stress Of Tax Time
Everyone agrees that tax time can be stressful. Some people find the tediousness of assembling year-long receipts enough to pull their hair out. Others just hate the thought of how much money they pay into their taxes every year especially when they think of all the things they would otherwise buy with it. There is also the added pressure of legal action against you if you omit any information that could be considered important by the taxation authorities. It doesn’t matter whether your omission was unintentional, you could be prosecuted for tax evasion and all manner of unpleasant things like jail time or wage garnishment could happen to you.
Hiring an accounting firm or a private accountant can help mitigate the stresses of tax time be they real or imagined. Although federal tax laws are standard across the country, state tax laws may vary. Having an accountant who is familiar with the tax laws of your state can translate to more tax dollars in your wallet.
And now…a bit of “humor” to brighten your taxation day! 🙂
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