Marriage & Money: Key Financial Surprises to Know About

Preparing for marriage is an exciting time. In many ways, you are getting ready to begin a completely new life. It’s easy to get caught up in that excitement and preparation but neglect some of the key financial changes that are coming. Here are some of the common surprises.

Tax Filing

When you get married, you will no longer be filing your taxes as “single.” This may be obvious, but what may not be top of mind is that it doesn’t matter if you get married on January 1 or December 31; when you go to file taxes, the tax rules apply for the full year. For most*, you will file as Married Filing Jointly (MFJ) or Married Filing Separately (MFS), which can mean a drastic change in outcome for your tax filing.

*Filing as Head of Household is only possible in unique instances

Before the end of the year, consider running the math to estimate what your total combined income will be, as well as your tax withholding. That way, you can prevent surprises when tax season arrives.

Income Thresholds May Now Be Applicable to You

What’s likely even further down your list of things to do is to evaluate whether your combined income exceeds key thresholds.

For example, you may be contributing to a Roth IRA as an individual, but your combined income might make you both ineligible for contributions. This is an especially common oversight, catching many off guard. Contributions made early in the year that you get married are still subject to the tax limits, even if they were made prior to marriage.

Other income-based impacts to be aware of:

• Traditional IRA Deduction — if either spouse is covered by a workplace plan, your ability to deduct contributions begins to phase out starting at $123,000 MAGI (2025)

• Saver’s credit – this credit for low- and moderate-income retirement savers may no longer be available ($80,000 income limit for those filing jointly in 2025)

• Adoption credit – credit starts to phase out at $252,150 MAGI for joint filers in 2025.

• Education tax credits – even if only one of you is in school, your combined income may make you both ineligible for these credits

• Passive loss rules for rental property – the ability to deduct real estate losses from actively managed rentals quickly goes away for two moderately high earners

• Net investment income tax – when MAGI exceeds $250k (MFJ), you may be subject to a 3.8% surtax on your investment income; and if your spouse receives substantial income from investments, this can be a totally new tax that you aren’t used to

• HSA/FSA – the HSA account’s family limit applies if either of you has a family high-deductible health plan; combined contributions to the HSA cannot exceed the family cap. Additionally, contributions to a Dependent Care FSA are capped at $2,500 if MFS vs. $5,000 if MFJ

While these are some of the common financial implications, there are certainly others. Ultimately, awareness and preparation are important so evaluate your finances together for any adjustments you might need to make.