Categories: Accounting, Individual Tax Issues, Our Team, Raleigh CPA Firm
by Dwayne Murphy
There are a number of things to consider when getting married among them are various financial considerations. Below are just a few items to discuss with financial implications:
- Discuss past financial issues and future goals such as:
- Current income, debt and spending habits.
- Career paths and goals – such as are there plans in going back to school, career changes or job relocations.
- Children, how many, and if they will be in day care or if one parent will stay home and if they plan or want to go back to work at some point.
- Whether you might have an older parent living with you in the future and all the financial costs that would be involved.
- Retirement planning and goals – as in your current situation, what your end goal is and how you plan to get there. Then determine if you want to start a combined retirement account or keep your individual retirement accounts separate.
- Discuss who will handle the finances:
- While you may want to designate one of you to handle the finances, both of you should be aware of your goals, spending habits and investments. This will make both of you feel responsible for saving and want to help contribute.
- Joint or separate accounts?
- Joint Accounts
- Trust is the key here as this is probably the most convenient as all the money goes in and comes out of one account. However, if one of you makes more money or has more debt than the other then it could seem unfair to share everything.
- Another option is to share a common account as well as keep separate accounts. The common account would be for common bills and to save for common goals such as a house. The separate accounts would be for individual spending habits. The issue here is how much each of you will contribute to the joint accounts, especially if one of you makes considerably more than the other.
- Separate Accounts
- This could be the easiest solutions for people with large balances in accounts that would be a hassle to move and not having to worry about opening another credit card in both names. The issue here is who is responsible for what bills and for saving towards common goals.
- Tax considerations
- First, understand the tax brackets and how your new income will be affected. Then update your withholding form W-4 and applicable state form to adjust the amount of taxes withheld from your paycheck. This hopefully should keep you from getting a shock come tax time.
- Joint Accounts
In conclusion there are a number of things to consider when getting married and lot of them have financial implications. Hopefully by discussing some of the items above it will help to achieve a healthy financial marriage. Contact our office for additional tax advice.
Dwayne ([email protected]) is an Audit Senior with Langdon & Company LLP. He mainly works with various types of non-profit associations.