Getting married?
First of all, we would like to congratulate you on starting your new life journey.
Secondly, you are simply in for a treat.
Not only you will get the blessings of your loved ones, but also from Internal Revenue Service themselves when you file your taxes the first year after getting married.
Taxpayers have been complaining about the marriage penalty for quite a few years.
Why?
That’s because in some cases, the spouse earned similar or more. And this combination was the reason why the couple had to pay higher taxes than they would even have to when they were single.
And that’s the reason Congress decided to do something about it.
Congress took various steps to reduce the penalty such that the joint bill would be approximately similar to the combination of what they paid individually when they were single.
However, there can always be marriage penalties. Everything depends on the income of the couple.
If anyone of you earns less than the other, then the lower one can simply pull the one with a higher salary into a lower bracket.
This will lead to a reduction in the overall tax.
Both of you might have some dreams and would want to reach heights and have good salaries.
However, if anyone of you earns little or nothing, you are in for a treat when we talk about the tax benefits.
And that’s the reason we want to inform you about the tax advantages that you are subject to after getting married.
Without wasting any further time, let’s just get right to it.
A Jobless Spouse Can Certainly Have An IRA
Even if either one of you doesn’t work, you can contribute to an Individual Retirement Arrangement (IRA).
The main point at which the overall benefits of IRA fade out based on the income is simply much higher for the couples than for those who are single.
Tax Shelter
While we want you to grow and succeed in life, sometimes certain circumstances lead to failure.
And if you are observing some negative numbers in your business, it will be beneficial for both of the spouses.
If you are the one who’s facing a loss, then you might not be able to take advantage of certain deductions.
However, if you are the one who’s making money, then you may use the loss as a tax write-off.
A Marriage Can Secure The Estate
If you are married, then you can simply secure all of your assets that you leave behind when you die.
According to Federal Tax Laws, you can simply leave behind any amount of money for your spouse without even having to generate estate tax.
This will protect the deceased’s assets until the day the spouse dies.
Benefit-Shop
Do both of you have any benefit packages offered by the company that employs you?
Well, then! You can simply pick out the most valuable one out of them.
You can use both of the plans to create a perfect mixture for both of you to save taxes in other ways.
Let’s consider an example.
Suppose that you have two children that are dependent on you. In this case, they can benefit from plans like dependent care plans.
Greater Charitable Contribution Deductions
Depending on your income, there’s a limit that’s placed on the charitable contributions that will be deducted in a single year.
And if you are married, then you will see an increase in the limit.
Let’s just suppose that any of you makes significant charitable contributions. However, the one who makes them doesn’t have an income of about double of that amount, the excess contributions are simply carried to the next year.
In a joint return, you can add your spouse’s income to determine the currently deductible amount. This will help you save the current taxes.
Children get you lots of Tax Deductions
Some people that are getting married already have children. If you already have children, then you are aware of all the tax savings that come along with that. Read more HERE on the tax savings with children.
Filing Takes Less Expense & Time
Plain and simple!
Filing your tax returns individually would have been an enormous burden.
The amount of paperwork and different expenses might have totally troubled you entirely.
However, that’s not the case with married couples.
If you are married, then both of you have to file a single tax return.
And this means less paperwork and lower expenses.
Tax Downsides
We talked about the different tax benefits for married couples.
However, each coin has two sides.
There exist some drawbacks as well.
However, that doesn’t mean that you should be afraid of getting married.
You can consider them as some unwelcome gifts that you usually receive in the marriages.
Once you are done with signing up for the joint return, you are simply responsible for each and every number that’s in it.
In case, any figure is fudged by anyone of you; then the other one is equally responsible as well. Both of you will have to suffer the consequences.
However, if any kinds of mistakes or omissions were made by your spouse prior to the marriage, then you don’t need to worry about it.
You can simply prove that you have no knowledge about it.
Plus, you will find it really hard to acquire the higher minimum percentages of the income required to deduct the entire medical expenses.
And if there’s an existing garnishment for child support or unpaid loan against any one of you, it could lead to a delay in the refund. In some cases, it might be blocked as well.
Conclusion
And that’s it.
Marriage!
A single word that changes your life entirely.
If you are getting married, then we wish you all the best for your new life journey.
And the tax benefits!
What more could you ask for?
Getting married or newly married? We hope this blog post was super helpful! Give the experts at Tampa Bay Taxes a call and we can answer any of your other questions! 813-515-0323