Say ‘Yes’ to Tax Benefits Of Marriage
Getting married doesn't only benefit you when it comes to finding a life partner and starting a family. Being married can also benefit you when it comes to filing your taxes. There are numerous tax benefits of marriage. When you marry, you should make yourself aware of these benefits.
Paying taxes can be a big expense every year. Anything you can do to reduce your tax liability can benefit you significantly financially. You need to be informed about tax and marriage. You don't want to miss out on tax benefits you qualify for after you marry. Do your research. It can give both you and your spouse peace of mind after marrying to know that you both will enjoy reduced tax liability.
The following are some important reasons to say "yes" to the tax benefits of marriage.
1. Being In a Lower Tax Bracket
The tax bracket you're in has a big impact of how much you pay in taxes. One of the tax benefits of marriage is being placed in a lower tax bracket. If you make significantly more than your spouse, you may be in a lower tax bracket when you file jointly.
When you're in a lower tax bracket, you'll pay a lower percentage of your income in tax.
It's definitely in your best interests to file jointly if you make significantly more than your spouse!
This could result in significant savings. If you make more than your spouse, you're likely to be the breadwinner. This means that you're the one paying the tax bill. You should take advantage of being in a lower tax bracket.
The highest tax bracket for an unmarried person is 37 percent. Depending on your income, you can make enough to qualify for the highest tax bracket filing single but be at only 35 percent if you file jointly.
2. Making Contributions to an IRA
Having an IRA involves a lot of tax advantages. With an IRA, you can make untaxed contributions to a retirement account. When a spouse isn't working, he or she can contribute funds from a spouse to an IRA. This can add to the amount of untaxed income that the couple brings in.
If you're married and one spouse doesn't work, it's a good idea to establish two IRA accounts. When you do this, you and your spouse can double the amount of untaxed income that goes to IRA savings. This is a great way to significantly bring down taxable income for the year.
3. Qualifying For More Deductions As the Result Of Charitable Giving
In general, individuals can't claim any more than half of their income as a charitable contribution.
Tax benefits are considerable for married couples who make charitable donations each year. An individual can only claim so much of a deduction for charitable donations.
Married spouses who file jointly can use both incomes when calculating 50 percent for charitable deductions. This can make it so that married couples can enjoy more tax benefits for donating to charity. With two incomes together, 50 percent of total income can be significantly more.
4. Only Having to Submit One Tax Return For Two People
Preparing and filing a tax return is a lot of work. When you are married and you file jointly, you only have to worry about one tax return.
Marrying cuts the work of handling the annual tax return down in half for a couple.
One of the biggest tax benefits of marriage is only having to file one return. Filing only one return brings down expenses if you hire a tax accountant. When you file a joint return, only one return needs to be prepared. If you pay a tax preparer, then you only need to pay to have one tax return done. Many tax prepapers will charge a fee per return.
It's best to file only one tax return to get a straightforward understanding of your tax liability as a family. Filing jointly with only one return is especially important for married couples with children. That's because children will be declared as dependents on a married couple's tax return.
5. Being Eligible For More Deductions And Credits
There are a lot of different deductions that being married could potentially make a taxpayer eligible for. One possibility is a business loss write-off. If a married taxpayer has a business that loses a lot of money for the year, his or her spouse can use those losses to minimize income and tax liability for the year.
American Opportunity Credit
One possible credit that being married can help a taxpayer qualify for is the American Opportunity Credit. As an individual, a taxpayer might make too much to qualify.
A taxpayer who files single can't qualify if he or she makes more than $80,000.
However, that same taxpayer can qualify if he or she is married and makes $160,000 or less when filing jointly with his or her spouse.
6. Taking Advantage Of the Personal Residence Gain Exclusion
Many married couples jointly own a home. A home can go up in value between the time it is bought and sold. When a single individual files for taxes, they can enjoy an exclusion of as much as $250,000 if their home goes up in value and they sell their home. This amount is doubled for a married couple.
This means that a married couple can enjoy a personal residence gain exclusion of $500,000.
This makes a big difference for those who sell their home and make a lot of money on the sale.
Finally,
These are just a few of the tax benefits of being married. There may be other benefits to marriage when it comes to taxes. You need to take advantage of financial tools to maximize financial health in your marriage. Tools like Goalry can help both you and your spouse to improve finances. If you want help with taxes or other financial issues, Goalry can help you minimize expenses and maximize savings.
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Let your marriage improve your finances. With two incomes, you'll find that it's easier to meet financial goals. Even if only one of you is working, you still are likely to find that life is easier financially when you're married. Enjoy marital bliss and financial stability by saying yes to the tax benefits of marriage!