Here are 7 ways tax pros can help clients who are tying the knot.
In all the frenzy that goes into the June wedding season, the last thing and bride- or groomzilla is thinking about is their tax situation – but as Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting points out, there are a host of tax issues that kick in when you say, “I do.”
Luscombe suggested a number of areas where a tax practitioner’s expertise may be particularly useful to the newlyweds.
1. Help them pick a filing status
Depending on the newlyweds’ financial situation, there may be pros and cons to filing jointly or separately.
2. Spread the word on name changes
If either spouse’s name will change on the tax return, a matching change should be registered with the Social Security Administration.
3. Help sort out their benefits
All sorts of employee benefits – most obviously health care insurance – are extended to spouses, which can mean making some complicated choices.
4. Check their withholding
With the potential for a new filing status, new dependents, and maybe two income streams, it makes sense to review the newlyweds’ W-4 and check if they’re withholding too little or too much.
5. Find some charitable deductions
Is the happy couple using a charitable organization’s facilities for their wedding or reception? Or are they donating any wedding leftovers?
6. Did they get help paying for the wedding?
Given how expensive weddings have become – the average event costs around $35,000, according to Wolters Kluwer -- if parents or grandparents paid for expenses related to the special day, there may be gift tax issues.
7. Be careful with promotional items
Extra items from wedding vendors – a “free” tuxedo, extra flower arrangements, or the like – and other special deals may have tax consequences.
The Financial Accounting Standards Board released an accounting standards update Thursday to enhance the transparency of how nonprofits report contributed nonfinancial assets, also known as gifts in kind.
Rep. Pete Olson, a Republican from Texas, has introduced a bill that would offer tax incentives to employers who train workers about best practices for reducing the spread of COVID-19 in the workplace.