Married Taxpayers should review their income tax

If you have married in 2013, it is wise to review how that change affects your tax liability.   Likewise for taxpayers whose divorces are finalized during the year.  A change in your marital status affects your federal tax liability.  Whatever is your marital status on December 31st is your tax filing status for that tax year.

Newlywed’s wages are combined on the same return that might get pushed into a higher tax bracket.  If an adjustment is necessary, it’s best to change your withholding as soon as possible.  Some credits, adjustments and deductions kick-in or are eliminated, depending upon the amount of income reported on the return.  Just because two people received large refunds when filing single returns does not mean that they will get similar refunds when filing jointly.

Tax filings for 2013 will also include new federal surcharges for high income earners.  Capital Gains, interest, dividend and rental profits may be subject to a new 3.8% tax for jointly filed returns with more than $250,000 of AGI.  There also is a 0.9% tax on wages that exceed $250,000 for joint filers.  The threshold for both these new taxes is $200,000 for single filers. 

A tax complication exists for 2013.   The Supreme Court struck down components of the Defense of Marriage Act, so same sex married couples could file federal joint returns.  It is not yet clear if amended returns may be filed for previous years.  The details of how domestic partnerships and civil unions are processed are not yet available.  Any taxpayer who might be affected by the court’s DOMA decision is waiting for newly published IRS procedures.