MARRIAGE TAX

Wedding season is around the corner! The big day is finally here and your wedding day is worth every penny you spend, but it’s still nice to keep money in your pocket where you can, so let’s talk about the tax advantages and disadvantages you get from the IRS as a wedding gift when you file your tax return next year.

1. The most important topic is that in a marriage where one spouse makes substantially less money or does not work at all, the spouse that has higher income will have the same amount of income taxed at a lower tax bracket as a married person than as a single individual.

2. There is a standard deduction for married couples who file jointly is exactly double the standard deduction for someone filing single. For this year- 2016 this means singles could deduct $6,300.00 while married filing jointly couples could deduct double or $12,600.00.

3. This case applies to the lower tax brackets of 10% and 15%. Married couples filing jointly can earn (in combination of both incomes) twice as much as single individuals before moving on to the next bracket. The below chart shows the exact amounts for the year 2016. Below are the tax brackets for 2016 but also check out my website for the full brackets:

4. Most newly weds have the goal of someday buying the home of their dreams. Many work toward the home of their dreams by starting small and building up equity. If you are single, when you sell your home you can exclude up to $250,000.00 of the amount of gain from your income.  However, when you are married, as long as both spouses have lived in the house for at least two years of the past five years, the amount of exclusion will increase to $500,000.00.

If you are getting married this year, consult with us for free about the advantages you will get on your tax return for this year. There are many more benefits in addition to the above mentioned advantages. Planning for your next return is the key to your future financial success together.