Starry-eyed brides and grooms are typically all-consumed with the upcoming nuptials: who can and can’t be sat together, which distant cousin will be offended if they aren’t asked to be a part of the bridal party, and which caterer’s chicken meal option will taste the least like rubber? A big part of the future success of the marriage is often overlooked: all things surrounding money. And even worse? What impact will a future spouse’s income or payroll tax past-due bills have on the new couple???

First and foremost, the healthiest financial decision a couple can make before walking down the aisle is to meet with a trusted tax professional. Full disclosure of current and past tax practices and debts should be given to ensure the professional has all the information necessary to guide the couple to marital financial bliss. While it is relatively easy to determine any adjustments needed for W-2 paid positions to reflect a joint tax requirement moving forward, the time meeting with a tax professional is well-warranted. The changes made a few years ago to the W-4, the Federal Government’s “guide” to how much an employee should have withheld from their paycheck, has caused quite a bit of confusion and resulted in more than a fair share of new couples having a balance owed on their first jointly-filed annual income tax return.

Things become a bit more complicated when one of the spouses is self-employed and reports their financial affairs on a Schedule C, “Profit or Loss from Business.” Because a self-employed individual is responsible for submitting Estimated Tax Payments throughout the year, an unsuspecting spouse could be surprised with penalties on a jointly filed tax return if those tax payment dates are not tended to properly. Troubles abound when the Estimated Tax Payments are not tended to at all during the year and the new couple is met with a significant income tax bill on their first married filing joint tax return. The couple quickly goes from wedded bliss to financial stress!

If the husband/wife-to-be is not made aware of past-due income or payroll taxes their future spouse already accrued before what is to be their first year filing a joint income tax return, prepare for a doozy of a fight. The unsuspecting spouse will probably be anticipating their annual tax refund, but unless proactive measures are taken, any tax refund reported will be confiscated by the tax agency and applied to the past-due income or payroll tax debt, whether it’s with the IRS or the state tax agency. There are ways to prevent this situation from becoming a reality, but it will take coordination with your tax professional to make it happen. More to come on this in the coming weeks’ blogs.

In summary, anytime a couple reports their annual financial affairs on an income tax return claiming married filing jointly, there is exposure to both individuals for the debts and financial responsibilities of the other. Having a sound plan in place through the guidance of a tax professional is critical! And if you or one of your clients have a tax consequence that comes with having said, “ I do,” reach out to a tax debt resolution professional immediately. The team at Golden Lion Tax Solutions has over two decades of experience helping resolve tax debts reported on new couples’ annual income tax returns as well as tax refund confiscation of an innocent spouse for application to the tax debts of another. There is always a solution, and our team is one of the best at identifying the most applicable to each client’s unique situation.

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Trust. Protection. Wisdom.

Your future and your family deserve the right protection. Golden Lion Tax Solutions will be your advisor and confidant throughout the entire journey. We guarantee to offer you or your business best-case solutions for your tax debt. We are by your side every step of the way. Start now and get your life back.

For help with your tax debts, email contactus@goldenliontaxsolutions.com or call 833-LION-TAX (833-546-6829)

Disclaimer: There are requirements that must be satisfied in order to qualify for some of the tax solutions we discuss on our website. Not all of our services will be suitable for every client. Golden Lion Tax Solutions is here to help you find the most appropriate solution to fit your situation.