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Tax tips for Bristol, Levi and other newlyweds

By Kay Bell · Bankrate.com
Thursday, July 15, 2010
Posted: 9 am ET

Those crazy kids! Levi Johnston and Bristol Palin are engaged. Again.

It's not that surprising that their first betrothal didn't work out. They were thrown into the spotlight when Bristol's mom, former Alaska Gov. Sarah Palin, was tapped as the Republican vice presidential nominee.

Since then, the young couple has had a stormy relationship, not to mention a kid. But they swear this time they're older (all of 19 and 20, but for them, that is older), wiser and now ready to officially, legally tie the knot.

I wish them the best. Really! I may be a tax geek but I'm also a romantic tax geek. And as such I want to offer them -- and any of you other young or older lovers out there thinking of heading down the aisle -- some newlywed tax tips.

Let Uncle Sam know of your new name. I know it's 2010, but a lot of wives still take their husband's last name or create a hyphenated moniker. Let the Social Security Administration know by submitting Form SS-5. Without that notification, IRS computers won't recognize your new name, which could cause all sorts of tax troubles.

Tell the IRS where you live. If you move into his place, or he into yours or you get a new home altogether, tell the tax man by filing Form 8822. That way you'll get all IRS information that arrives via the Postal Service, as well as any refund if you still get it by snail mail instead of direct deposit.

Adjust your withholding. Marriage is definitely one of those big life changes that will affect your tax bill. Newly married couples should change their W-4 forms at work to reflect their wedded status and complete the withholding worksheet (or use the IRS online withholding calculator) to figure out the new appropriate amounts to be taken from each of your paychecks.

Choose how you'll file. Two different returns work better.

Look at your individual tax situations and what your new married tax circumstances are and pick the filing status that works best for you. This probably will mean running the numbers for both jointly and separately filed returns, but the extra work could really pay off at tax time.

Take advantage of child-related breaks. Nowadays, a lot of newlyweds are, like Bristol and Levi, parents. From a tax standpoint, the chip off the old block can help chip away at a tax bill, thanks in large part to the child tax credit.

Don't forget the the credit for dependent care if you pay someone to look after your kids while you work. Or if you have a nanny, there are tax issues there, too.

And older newlyweds with older kids heading off to college could net some tax savings from a variety of education tax breaks.

I hope this helps Bristol and Levi and you if you're getting married. Congratulations and best wishes to all for marital and tax-saving success.

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