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IRS offers Invaluable Tax Tips for the Newly Married
With the summer wedding season in full swing, the Internal Revenue Service offers the soon-to-be married and the just-married
seven invaluable tax tips to consider, including reviewing their changing tax status.
“The last thing newly-married couples are going to have on their minds is taxes,” said IRS spokesman David Tucker II. “But here
are some important steps they should consider to avoid stress at tax time months later.”
The seven tips for newlyweds are:
1. Notify the Social Security Administration Report any name change to the Social Security Administration so your name and
Social Security number will match when you file your next tax return. File a Form SS-5, Application for a Social Security Card, at
your local SSA office. The form is available on SSA’s website at www.ssa.gov, by calling 800-772-1213 or at local offices.
2. Notify the IRS if you move If you have a new address you should notify the IRS by sending Form 8822, Change of
Address. You may download Form 8822 from www.IRS.gov or order it by calling 800–TAX–FORM (800–829–3676).
3. Notify the U.S. Postal Service You should also notify the U.S. Postal Service when you move so it can forward any IRS
correspondence or refunds.
4. Notify your employer Report any name and address changes to your employer(s) to make sure you receive your Form W-
2, Wage and Tax Statement, after the end of the year.
5. Check your withholding If both you and your spouse work, your combined income may place you in a higher tax bracket.
You can use the IRS Withholding Calculator available on www.irs.gov to assist you in determining the correct amount of
withholding needed for your new filing status. The IRS Withholding Calculator will give you the information you need to complete
a new Form W-4, Employee's Withholding Allowance Certificate. You can fill it out and print it online and then give the form to
your employer(s) so they withhold the correct amount from your pay.
6. Select the right tax form Choosing the right individual income tax form can help save money. Newly married taxpayers
may find that they now have enough deductions to itemize on their tax returns. Itemized deductions must be claimed on a Form
1040, not a 1040A or 1040EZ.
7. Choose the best filing status A person’s marital status on Dec. 31 determines whether the person is considered married
for that year. Generally, the tax law allows married couples to choose to file their federal income tax return either jointly or
separately in any given year. Figuring the tax both ways can determine which filing status will result in the lowest tax, but usually
filing jointly is more beneficial.
For more information about changing your name, address and income tax withholding visit www.irs.gov. IRS forms and
publications can be obtained from www.irs.gov or by calling 800-TAX-FORM (800-829-3676).
With the summer wedding season in full swing, the Internal Revenue Service offers the soon-to-be married and the just-married
seven invaluable tax tips to consider, including reviewing their changing tax status.
“The last thing newly-married couples are going to have on their minds is taxes,” said IRS spokesman David Tucker II. “But here
are some important steps they should consider to avoid stress at tax time months later.”
The seven tips for newlyweds are:
1. Notify the Social Security Administration Report any name change to the Social Security Administration so your name and
Social Security number will match when you file your next tax return. File a Form SS-5, Application for a Social Security Card, at
your local SSA office. The form is available on SSA’s website at www.ssa.gov, by calling 800-772-1213 or at local offices.
2. Notify the IRS if you move If you have a new address you should notify the IRS by sending Form 8822, Change of
Address. You may download Form 8822 from www.IRS.gov or order it by calling 800–TAX–FORM (800–829–3676).
3. Notify the U.S. Postal Service You should also notify the U.S. Postal Service when you move so it can forward any IRS
correspondence or refunds.
4. Notify your employer Report any name and address changes to your employer(s) to make sure you receive your Form W-
2, Wage and Tax Statement, after the end of the year.
5. Check your withholding If both you and your spouse work, your combined income may place you in a higher tax bracket.
You can use the IRS Withholding Calculator available on www.irs.gov to assist you in determining the correct amount of
withholding needed for your new filing status. The IRS Withholding Calculator will give you the information you need to complete
a new Form W-4, Employee's Withholding Allowance Certificate. You can fill it out and print it online and then give the form to
your employer(s) so they withhold the correct amount from your pay.
6. Select the right tax form Choosing the right individual income tax form can help save money. Newly married taxpayers
may find that they now have enough deductions to itemize on their tax returns. Itemized deductions must be claimed on a Form
1040, not a 1040A or 1040EZ.
7. Choose the best filing status A person’s marital status on Dec. 31 determines whether the person is considered married
for that year. Generally, the tax law allows married couples to choose to file their federal income tax return either jointly or
separately in any given year. Figuring the tax both ways can determine which filing status will result in the lowest tax, but usually
filing jointly is more beneficial.
For more information about changing your name, address and income tax withholding visit www.irs.gov. IRS forms and
publications can be obtained from www.irs.gov or by calling 800-TAX-FORM (800-829-3676).
Women And Retirement Savings
Planning and saving for retirement may seem like goals that are far in the future. Yet saving, especially for matters
to women – and especially to you!
Do You Know?
• Women are more likely to work in part-time jobs that don't qualify for a retirement plan. And working women are more likely
than men to interrupt their careers to take care of family members. Therefore, they work fewer years and contribute less toward
their retirement, resulting in lower lifetime savings. If you work and if you qualify, join a retirement plan now.
• Of the 62 million wage and salaried women (age 21 to 64) working in the United States, just 45 percent participated in a
retirement plan. Remember, even small amounts can earn interest and add up over time.
• On average, a female retiring at age 65 can expect to live another 19 years, 3 years longer than a man retiring at the
same age. Savings can increase a woman's chances of having enough money to last during her retirement.
• By and large, women invest more conservatively than men. Choose carefully where you put your money and learn how to
make your investments grow.
Start Here...Start Now
Here are eight questions to help you think about retirement and take charge of your financial future:
Do you work for an employer that offers a retirement plan?
If your employer offers a retirement plan, join it as soon as you can and contribute as much as the plan allows. Most employers
with a 401(k) plan match a fixed percentage of the employee's contribution. The most common match is 50 percent of the
employee's contribution up to a maximum percentage of wages or salary (usually 6 percent). The majority of employers offer 50
percent or more. That's like getting free money! While all job categories may not be included in your employer’s plan (those of
part-time or temporary workers, for instance), your job may be one that is.
Remember, by saving early you have time on your side. Your savings will grow and your earnings will compound over time.
________________________________________
Have you worked at the job long enough to earn retirement benefits?
In many companies, you may have to work for 5 years to become eligible to receive retirement benefits. Some workplaces have
a shorter vesting period (vesting simply means that you have worked long enough to earn the right to benefits from a savings or
pension plan).
Too often employees, especially women, quit work, transfer to another job, or interrupt their work lives just short of the time
required to become vested. Ask the personnel office, retirement plan administrator, or union representative about the vesting
period and other details of your company’s plan.
________________________________________
Do you keep copies of the documents that define the provisions of your retirement plan?
In addition to asking questions of company or retirement plan officials, you should keep copies of the summary plan description
(SPD) and any amendments. The SPD is a document that retirement plan administrators are required to prepare, and it outlines
your benefits and how they are calculated. The SPD also spells out the financial consequences – usually a reduction in benefits
– if you decide to retire early (earlier than age 65 in many plans). You probably received a copy of the SPD when you joined the
pension or savings plan, but you may request another one from your employer or plan administrator. Also remember to keep
retirement-related records from all jobs. They provide valuable information about your benefit rights, even when you no longer
work for a company.
________________________________________
What happens to your retirement benefits if you change jobs?
You may lose the retirement benefits you have earned if you leave your job before you are vested. However, once vested, you
have the right to receive benefits even when you leave your job. In such cases, the company may allow, or in certain cases may
insist, that you take your retirement benefits in a lump sum when you leave. However, other companies may not permit you to
receive your money until retirement. The rules for your plan are spelled out in the SPD.
A word of caution: If you receive your retirement benefits in a lump sum, you will owe additional income taxes, and may owe a
penalty tax. A better way is to reinvest your savings in another qualified retirement plan or an Individual Retirement Account
(IRA) within 60 days. You avoid tax penalties and you keep your long-term retirement goals on track.
If you do want to reinvest the money, it is important that you do not directly receive it. If you receive the money directly, you will
have to pay a 20 percent withholding tax on the amount you receive and then file for a refund in the next year, providing proof
that you have transferred the funds to an IRA. Instead, instruct the retirement plan to transfer your money directly to an IRA you
have established or to another qualified retirement plan. This is easy to do using simple forms supplied by the new plan. If you
want help with the forms, representatives of the plan are generally available to assist you.
________________________________________
Do you know how you can save for retirement even if you don’t belong to an employer-sponsored retirement plan?
Anyone receiving compensation or married to someone receiving compensation can contribute to an IRA. In addition, if you are
self-employed, you can start a Simplified Employment Plan (SEP) or a Savings Incentive Match Plan for Employees of Small
Employers (SIMPLE).
As with other retirement savings plans, there may be tax consequences, and possibly penalties, if you withdraw your savings
early.
________________________________________
Are you tracking your Social Security earnings?
More women than ever work, pay Social Security taxes, and earn credit toward a monthly income at retirement. These earnings
can mean some income for you and your family in the form of monthly benefits if you become disabled and can no longer work.
If you die, your survivors may be eligible for benefits. In addition, you may be eligible for Social Security benefits through your
husband’s work and can receive benefits when he retires or if he becomes disabled or dies. Special rules apply if you and your
husband have been employed and both have paid into Social Security. Special rules also apply if you are divorced or if you
have a government retirement plan.
To calculate your benefit estimate, visit the Social Security Administration’s Web site.
________________________________________
Are you entitled to a portion of your spouse’s retirement benefit if you and your husband divorce?
As part of a divorce or legal separation, you may be able to obtain rights to a portion of your spouse’s retirement benefit (or he
may be able to obtain a portion of yours). In most private-sector plans, this is done using a qualified domestic relations order
(QDRO) issued by the court. You or your attorney should consult your spouse’s plan administrator to determine what
requirements the QDRO must meet.
________________________________________
Are you aware of the rules that govern your retirement plan and the retirement plan of your spouse if either of you
dies?
The rules are different for defined contribution and defined benefit plans.
If you or your spouse belong to a defined benefit plan (a traditional pension plan), the surviving spouse may be entitled to
receive a survivor benefit when the enrolled employee dies. This survivor benefit is automatic unless both spouses agree, in
writing, to forfeit the benefit. You will need to check the SPD or consult with the plan administrator regarding survivor annuities
or other death benefits.
If you are a beneficiary under your spouse’s defined benefit pension plan, you may want to request a copy of the SPD and other
plan documents that describe your spouse’s vested benefits. You will probably want to make the request in writing, and you may
be charged a fee for the information.
The rules may be different if you or your spouse participate in a defined contribution plan (such as a 401(k) plan). Consult the
plan administrator for details about spousal rights.
________________________________________
It's Up to You
Once you’ve answered these questions, you’re on the road to learning more about financial freedom. As a resource for women
(and men), the Employee Benefits Security Administration has issued Savings Fitness: A Guide to Your Money and Your
Financial Future and Taking the Mystery Out of Retirement Planning. The booklets include resources and Web site sections
(see the Resources section to get a copy).
Resources
U.S. Department of Labor
Employee Benefits Security Administration
Publication request line: 1.866.444.EBSA (3272)
Web site: www.dol.gov/ebsa
Planning and saving for retirement may seem like goals that are far in the future. Yet saving, especially for matters
to women – and especially to you!
Do You Know?
• Women are more likely to work in part-time jobs that don't qualify for a retirement plan. And working women are more likely
than men to interrupt their careers to take care of family members. Therefore, they work fewer years and contribute less toward
their retirement, resulting in lower lifetime savings. If you work and if you qualify, join a retirement plan now.
• Of the 62 million wage and salaried women (age 21 to 64) working in the United States, just 45 percent participated in a
retirement plan. Remember, even small amounts can earn interest and add up over time.
• On average, a female retiring at age 65 can expect to live another 19 years, 3 years longer than a man retiring at the
same age. Savings can increase a woman's chances of having enough money to last during her retirement.
• By and large, women invest more conservatively than men. Choose carefully where you put your money and learn how to
make your investments grow.
Start Here...Start Now
Here are eight questions to help you think about retirement and take charge of your financial future:
Do you work for an employer that offers a retirement plan?
If your employer offers a retirement plan, join it as soon as you can and contribute as much as the plan allows. Most employers
with a 401(k) plan match a fixed percentage of the employee's contribution. The most common match is 50 percent of the
employee's contribution up to a maximum percentage of wages or salary (usually 6 percent). The majority of employers offer 50
percent or more. That's like getting free money! While all job categories may not be included in your employer’s plan (those of
part-time or temporary workers, for instance), your job may be one that is.
Remember, by saving early you have time on your side. Your savings will grow and your earnings will compound over time.
________________________________________
Have you worked at the job long enough to earn retirement benefits?
In many companies, you may have to work for 5 years to become eligible to receive retirement benefits. Some workplaces have
a shorter vesting period (vesting simply means that you have worked long enough to earn the right to benefits from a savings or
pension plan).
Too often employees, especially women, quit work, transfer to another job, or interrupt their work lives just short of the time
required to become vested. Ask the personnel office, retirement plan administrator, or union representative about the vesting
period and other details of your company’s plan.
________________________________________
Do you keep copies of the documents that define the provisions of your retirement plan?
In addition to asking questions of company or retirement plan officials, you should keep copies of the summary plan description
(SPD) and any amendments. The SPD is a document that retirement plan administrators are required to prepare, and it outlines
your benefits and how they are calculated. The SPD also spells out the financial consequences – usually a reduction in benefits
– if you decide to retire early (earlier than age 65 in many plans). You probably received a copy of the SPD when you joined the
pension or savings plan, but you may request another one from your employer or plan administrator. Also remember to keep
retirement-related records from all jobs. They provide valuable information about your benefit rights, even when you no longer
work for a company.
________________________________________
What happens to your retirement benefits if you change jobs?
You may lose the retirement benefits you have earned if you leave your job before you are vested. However, once vested, you
have the right to receive benefits even when you leave your job. In such cases, the company may allow, or in certain cases may
insist, that you take your retirement benefits in a lump sum when you leave. However, other companies may not permit you to
receive your money until retirement. The rules for your plan are spelled out in the SPD.
A word of caution: If you receive your retirement benefits in a lump sum, you will owe additional income taxes, and may owe a
penalty tax. A better way is to reinvest your savings in another qualified retirement plan or an Individual Retirement Account
(IRA) within 60 days. You avoid tax penalties and you keep your long-term retirement goals on track.
If you do want to reinvest the money, it is important that you do not directly receive it. If you receive the money directly, you will
have to pay a 20 percent withholding tax on the amount you receive and then file for a refund in the next year, providing proof
that you have transferred the funds to an IRA. Instead, instruct the retirement plan to transfer your money directly to an IRA you
have established or to another qualified retirement plan. This is easy to do using simple forms supplied by the new plan. If you
want help with the forms, representatives of the plan are generally available to assist you.
________________________________________
Do you know how you can save for retirement even if you don’t belong to an employer-sponsored retirement plan?
Anyone receiving compensation or married to someone receiving compensation can contribute to an IRA. In addition, if you are
self-employed, you can start a Simplified Employment Plan (SEP) or a Savings Incentive Match Plan for Employees of Small
Employers (SIMPLE).
As with other retirement savings plans, there may be tax consequences, and possibly penalties, if you withdraw your savings
early.
________________________________________
Are you tracking your Social Security earnings?
More women than ever work, pay Social Security taxes, and earn credit toward a monthly income at retirement. These earnings
can mean some income for you and your family in the form of monthly benefits if you become disabled and can no longer work.
If you die, your survivors may be eligible for benefits. In addition, you may be eligible for Social Security benefits through your
husband’s work and can receive benefits when he retires or if he becomes disabled or dies. Special rules apply if you and your
husband have been employed and both have paid into Social Security. Special rules also apply if you are divorced or if you
have a government retirement plan.
To calculate your benefit estimate, visit the Social Security Administration’s Web site.
________________________________________
Are you entitled to a portion of your spouse’s retirement benefit if you and your husband divorce?
As part of a divorce or legal separation, you may be able to obtain rights to a portion of your spouse’s retirement benefit (or he
may be able to obtain a portion of yours). In most private-sector plans, this is done using a qualified domestic relations order
(QDRO) issued by the court. You or your attorney should consult your spouse’s plan administrator to determine what
requirements the QDRO must meet.
________________________________________
Are you aware of the rules that govern your retirement plan and the retirement plan of your spouse if either of you
dies?
The rules are different for defined contribution and defined benefit plans.
If you or your spouse belong to a defined benefit plan (a traditional pension plan), the surviving spouse may be entitled to
receive a survivor benefit when the enrolled employee dies. This survivor benefit is automatic unless both spouses agree, in
writing, to forfeit the benefit. You will need to check the SPD or consult with the plan administrator regarding survivor annuities
or other death benefits.
If you are a beneficiary under your spouse’s defined benefit pension plan, you may want to request a copy of the SPD and other
plan documents that describe your spouse’s vested benefits. You will probably want to make the request in writing, and you may
be charged a fee for the information.
The rules may be different if you or your spouse participate in a defined contribution plan (such as a 401(k) plan). Consult the
plan administrator for details about spousal rights.
________________________________________
It's Up to You
Once you’ve answered these questions, you’re on the road to learning more about financial freedom. As a resource for women
(and men), the Employee Benefits Security Administration has issued Savings Fitness: A Guide to Your Money and Your
Financial Future and Taking the Mystery Out of Retirement Planning. The booklets include resources and Web site sections
(see the Resources section to get a copy).
Resources
U.S. Department of Labor
Employee Benefits Security Administration
Publication request line: 1.866.444.EBSA (3272)
Web site: www.dol.gov/ebsa
