California's same-sex married couples have enjoyed the privileges and responsibilities of legal marriage for a couple of years. With the ruling in Obergefell v. Hodges, the U.S. Supreme Court has now extended those rights to GLBT couples in every state. These couples will now have the often frustrating task of navigating state tax and probate laws as legal spouses. Yes, now the state and the federal government recognize the marriage, so filing the annual tax return will be a little easier, but estate and tax planning strategies will have to be reviewed and updated accordingly.
Even for seasoned same-sex marrieds here in California, July may be a good time to review those plans. And, of course, June is a big month for weddings, regardless of gender preference. Summer is here, and we all may as well enjoy the patio and review our estate and tax checklists.
If you are a newlywed:
- Notify the federal government of any name change. Tax time will be easier if your new name is linked to your Social Security number.
- Let the IRS know about a change of address. Again, tax time will be easier if the IRS doesn't think you're still at your old address when a return comes in with your new address on it.
- Review your tax withholding with the state and the federal government. Combining incomes can bump you into a higher tax bracket. Remember, to the IRS your marital status changes for the whole year. Even if the ceremony is on Dec. 31, 2015, the IRS will treat you as married for all of 2015.
- Double check your employer-sponsored benefits to make sure you are getting the most out of health plans and to make sure your 401(k) and life insurance beneficiary forms are up-to-date.
If you've been married for a while:
- Double check your withholding strategy, now that you have six months of data. Are you where you thought you'd be?
- Make sure your retirement withholding and investments are achieving your goals.
Everyone should remember to contact a tax attorney as soon as possible after a major life change: a wedding, a divorce, a new child, an inheritance, retirement -- anything that can affect your tax obligation or complicate your return. Even seasoned ship's captains enlist the aid of an experienced pilot when navigating tricky waters.
Source: Bankrate.com, "6 tax tips for newlyweds," Kay Bell, June 30, 2015