5 Tips for Filing Taxes as a Newly Married Couple
It wasn't that long ago where I could file a 1040ez and be done with it in 2 minutes. However, in the last 3 years, I've had some pretty significant life changes. Taxes became ridiculously complicated overnight, and boy have we made our mistakes. I'll share a few with you, so you don't make the mistake too.
The major changes in my life included having a dependent, marriage, and owning a home and paying property taxes. All of these are important.
1. Earned Income Tax Credit. For better or for worse, we used to qualify for this. After becoming married, we no longer did. That was a huge blow. Huge. Instead of getting a nice rebate, we were lucky to get anything back. Ouch. And in some cases, we actually had to pay in. Before we were married, my wife was a single mother and got a nice size rebate each year because she had a dependent. Once we got married all of that went away. Which kind of seems unfair doesn't it? We get penalized for becoming a stable family? Just venting here...
2. Not changing your with holdings after becoming married. This was a mistake that my wife and I made after we were married in 2011. She was still claiming too many dependents on her w-4 and neither of us ever thought to go back in a change it. So at the end of the year, she had hardly any taxes taken out. That's not good.
3. Itemized deductions may not be for you. You always hear people saying, "save your receipts for a tax right off." You may even find yourself buying certain things just so you can write them off. It makes since if you have a bunch of write offs and go over the standard deduction amount. However in our case, we didn't go over the standard deduction amount. So all of those receipts that we had saved up and were excited to enter in didn't mean jack. However, that being said....
4. SAVE EVERYTHING! You never know what you're going to need. Keep all of your taxes in a safe place, filed neatly. Keep a box where you can put receipts of purchases, and organize receipts for major purchases or expenses.
5. Nothing is free. You see commercials always this time of year for tax services that are free, whether it will be online or in a store. Or the "free second look." It always costs something, they aren't a charity. They may say file your federal tax return free, but they will charge you on your state return. Nothing is free, and in most cases it can be really expensive. When I've used a professional account the cost has been near 500 dollars. Sometimes it is worth it, but a little extra work and knowledge on your part can save you in the long run. It's your decision. There is some free charitable organizations that help people with your taxes too, so keep an eye out for them. But if it's a business, it isn't free... remember that.
Ok, so who needs a drink now?