If your beloved goes down on one knee today, make sure you know the tax implications of saying yes.
While marriage is one of the biggest decisions people can make, it hardly comes as a surprise to learn that tax is often the last thing on the minds of any happy couple.
But, since the world of marriage is accompanied by a whole new set of tax implications, anyone bracing themselves for a walk down the aisle should also brace for the tax implications.
“Many Australian couples are unsure about where they stand tax-wise,” says Mark Chapman, tax communications director at H&R Block Tax Experts.
“For instance, many are under the impression that you’re required to lodge a combined tax return once you’re married, which isn’t true.
“Another important point is that joint income is recorded separately in each spouse’s tax returns, while newly married couples should also note that they are required to show [on their tax returns], that they are married.”
Tax tips for newlyweds
Changing your name
Providing you want to change your name, the details will have to be recorded prior to your return being lodged. You’ll also need to confirm your identity with the ATO when you do so, so you’ll be required to present documents such as your birth or marriage certificate.
Considering private insurance
Should you not have private health insurance, your combined income will be taken into account in determining whether you have to pay the Medicare levy surcharge. If you’re a low-income earner as a singleton but are getting hitched to a high-income earner, you might need to factor in that extra cost.
What happens to your house
In Australia, many people already own their own home before they marry. Typically, you can sell your main residence without having to pay CGT (capital gains tax), although an important point here is that spouses are only entitled to one main residence exemption for CGT purposes between them. If it is the case that both spouses own a main residence, they must select one residence for the CGT exemption.
Can your guests claim charitable wedding gifts?
Charity gifts are increasingly common wedding presents. If you’ve received one, the guest can claim a tax deduction for the gift providing it relates to a charity registered as a Deductible Gift Recipient. Visit abr.business.gov.au for more information.
“The world of marriage opens up a whole new range of tax rules,” Chapman says.
“If you want to ensure your taxes are in order, it’s best you enlist the services of a tax agent such as H&R Block.”