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Benefits of Merging Money After Marriage

Young couple discusses the financial advantages of getting married over coffee.

Merge Money After Marriage

You’ve probably heard that there are financial advantages of marriage. From better options for retirement and other benefits, to savings on expenses and marriage tax breaks, tying the knot can have big payoffs. (Don’t believe it? Check out this analysis from The Atlantic, which found that unmarried women can pay as much as a million dollars more over their lifetime than married women for taxes, health care and other services.)

Marriage 101

Here’s a short list of things you’ll want to do right away to make your marriage official. Note that even if you get married on December 31, you are considered married for that entire year in the eyes of the Internal Revenue Service (IRS).

Update your name and address. You must report name changes to the Social Security Administration right away. The name on your Social Security card has to match what’s on your tax return. Request a new Social Security card using Form SS-5 and report any address changes to the IRS and U.S. Postal Service.

Fill out a new W-4. Both you and your spouse need to update your W-4 withholding at work to reflect your change from single to married. Be aware that you might get bumped into a higher tax bracket when you combine income, but you also will be eligible for the higher standard deduction for married couples. On the other side, if one spouse earns far less, you both might be pulled into a lower tax bracket as a couple.

In some cases, you may want to have more taken out of one spouse’s check. This happens when one spouse is not having enough withheld throughout the year — which leads to owing more at tax time. To avoid owing, some people choose the “Married, but withhold at higher single rate” option.

If you’ve never quite understood your W-4 withholding, check out the IRS’s withholding calculator or take SAM’s Money Basics Employment course.

Marriage and Taxes

Generally, married couples have two options:

  • Married filing jointly — Even if one spouse has no income, you can file one tax return as a couple. Filing a single tax return, in and of itself might save you money. One return means that you’ll probably spend less time and money doing your taxes yourselves or paying someone else to do them. You both sign the return and you’re both equally responsible for its accuracy.
  • Married filing separately – Even when married, you still can fill out separate returns if you like. You miss out on the higher standard deduction for married people, and possibly on some tax breaks, but this option might make sense if you don’t trust your spouse to be truthful, or if you know that your spouse didn’t have enough tax withheld throughout the year. If you file separately, only one of you can claim your children as dependents.

If something goes wrong on your joint tax return, you do have some protection. You can file for Innocent Spouse Relief if your spouse purposely left things off or lied on your return and you can file for an Injured Spouse Allocation if your spouse has penalties for back child support or unpaid student loans that had nothing to do with you. Read up on the latest rules for tax withholding at

Same Sex, Common Law and Domestic Partnerships

Same-sex married couples are treated the same as traditional married couples, even if the jurisdiction where you live doesn’t recognize same-sex marriages. Couples in common law states also can file joint returns, but there are varying rules for domestic partnerships. In most cases, domestic partners should file as “single” for federal tax purposes. Do research into your specific situation before filing.

Other Marriage Tips (and Perks)

To get the full financial advantages of marriage, you might want to dedicate a few date nights to planning your future together.

Compare Workplace Benefits: You can choose between which of you has better health insurance and retirement plans. Even if one of you doesn’t work or has to take time off, the working spouse can contribute to an individual retirement account (IRA) for the nonworking spouse. The rules for IRAs state that normally you have to have taxable income in order to contribute, but if you’re married, your spouse can contribute on your behalf.

Set Up Joint Checking and Savings Accounts: You might not be ready to merge everything, but at least use a shared account for your common bills such as rent or mortgage, utilities and household expenses like food, cleaning supplies, maintenance and repairs.

Save for Emergencies: Whether you’re married or single, you need emergency savings and contingency plans in case of medical problems or unexpected job loss. Consider not only that something might happen to you or your spouse, but also that you might have to take time off to care for other family members.

Dream Big: Get clear on what you want individually and together as a couple. Do you want to buy a house? Take a big vacation? Retire early? Hold each other accountable and be open to learning from one another (or learning about something that’s new to both of you) without judgment. Be each other’s study buddy.

One of the biggest advantages of marriage is that you get to support each other when times are hard and celebrate each other’s successes. Here’s to wedded bliss!

[Any reference to a specific company, commercial product, process or service does not constitute or imply an endorsement or recommendation by the National Endowment for Financial Education.]