Tax Law Blog: Are Holiday Weddings a Form of Tax Planning?


Your marital status for tax purposes is determined as of December 31. That means if you get married on New Year's Eve, you are considered married for the entire year and can file as a married couple. Likewise, if a divorce is finalized by the end of the year, you will be considered unmarried for the entire year. Trust me, I am not the only one that has wondered if certain people getting married on New Year's Eve did it for tax purposes. This even made the list as a Reindeer Games Tax Tip on the Don't Mess with Taxes Blog. Regardless of why/when you get married or divorced, keep in mind its your status on December 31 that counts (for tax purposes).

A similar "rule" applies for children. A child who was born during the year is treated as living with you all year and therefore meets the requirements to claim a child tax credit. The same applies if you adopted a child during the year. Assuming you otherwise qualify, you receive the full credits and/or deductions for the child. Now, it takes much more time to plan a birth before the end of the year than to plan a quick wedding, but a quick search tells me many I am not the only one who has thought about this. I found many blogs and articles of soon-to-be parents planning to induce labor or schedule a delivery before December 31.

(Due to the fiscal cliff approaching, this year in particular has some major implications for things like the child tax credit and the child/dependent care credit, but I said this would be a "lighter" tax topic, so I am not going to get into that. Feel free to do a search and you can find plenty of information on that topic.)

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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