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Prince William and Kate aren't the only twentysomethings getting married

Financial advice for commoners tying the knot

April 24, 2011|By Eileen Ambrose, The Baltimore Sun

One way to help and not get burned: Add a spouse as an authorized user, but don't give him or her the card to use, Ulzheimer says.

Filing jointly or separately? As newlyweds, your income tax filing status will be married filing jointly or separately. Filing jointly is generally better.

"There are a lot of things you lose if you do file separately," says Mark Luscombe, principal tax analyst at CCH, a provider of tax information.

Couples filing separately aren't eligible for the earned income tax credit and certain education tax breaks, Luscombe notes. Plus, you can't invest in a tax-friendly Roth IRA if you make more than $10,000, while joint filers with income up to $169,000 can fully contribute.

Consider filing separately, though, if you have big medical bills, Luscombe adds. Expenses over 7.5 percent of income are deductible. That is a tough threshold to meet when you combine incomes on a joint return.

Both of you will be responsible for the information on a joint return. A good reason to file separately is if "you do not trust your spouse's finances or disclosure of tax information," says planner Pon. "In which case, I don't know if you want to be married anyway."

Wills & things Getting basic estate planning documents after you're married can protect loved ones if the worst happens.

A will dictates where you want your assets to go at death. A power of attorney allows you to name someone to make financial decisions for you if you're incapacitated.

An advance directive allows you to designate a person to make medical decisions for you if you're unable to do so. And you can spell out what sort of life-prolonging measures you want undertaken on your behalf. This may seem unnecessary for young, healthy couples. But the most high-profile life-support disputes involved patients who were stricken in their 20s, such as Terri Schiavo.

Beneficiary updates Singles often put a parent or sibling as the beneficiary of their life insurance or financial accounts. But if you want your new spouse to inherit this money, don't forget to change the beneficiary.

eileen.ambrose@baltsun.com

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