How Do Your Finances Change When You Get Married? FAQs, Part 2
This is a continuation of “How Do Your Finances Changes When You Get Married?” FAQs, Part 1
All organizations that you had correspondence with while using your unmarried name should be notified. You can begin with the following list:
- The Social Security Administration
- Department of Motor Vehicles
- Post Office
- Investment and bank accounts
- Voter’s registration office
- School alumni offices
- Credit cards and loans
- Club memberships
- Retirement accounts
- Passport office
- Insurance agents
Definitely. When an important life event occurs such as marriage, it should be updated. If not, your spouse and other beneficiaries will not get what is meant for them at the time of your death.
You are entitled to file a joint income tax return upon marriage. Although this simplifies the filing process, you will more than likely discover that your tax bill is either higher or lower than when you were single. It’s higher when you file together, as more of your income is taxed in the higher tax brackets. This is commonly known as the marriage tax penalty. In 2003, a tax law that intended to reduce the marriage penalty went into effect, but this law didn’t get rid of the penalty for higher bracket taxpayers.
Once married, you may not file separately in an attempt to avoid the marriage penalty. Actually, filing as married filing separately can raise your taxes. For the optimal filing status for your situation you should speak with your tax advisor.
Yes. After marriage, there are many ways of owning property. They differ from state to state.
- Sole tenancy, which is when one individual has ownership. The property is passed on in accordance with the will at death.
- Joint tenancy, with the privilege of survivorship. Two or more people have equal ownership. The property is passed to the joint owner upon death. This should be used to effectively avoid probate.
- Tenancy in common, property has joint ownership with the privilege of survivorship. The property is passed on according to your will upon death.
- Tenancy by the entirety, like joint tenancy, with privilege of survivorship. This doesn’t allow a spouse to get rid of the property without the other’s consent and is only possible for spouses.
- Community property, property that is gained through marriage that has equal ownership. States such as AZ, CA, ID, LA, NV, NM, TX, WA, and WI allow community property.
Scarsdale accountant Paul Herman is here to help you with all your personal finance needs. Please contact us for all inquiries and to receive your free personal finance consultation!
Herman and Company CPA’s proudly serves Rye NY, Mamaroneck NY, Purchase NY, Bedford NY, Scarsdale NY, South Salem NY and beyond.
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