It’s no secret that marriage is a life-changing event, often in ways you never expected. One of those oft-overlooked changes is the impact that getting married can have on your taxes. Learn more about the eligibility criteria and explore the best strategies to maximize your savings. Whether you’re newlyweds or are celebrating a milestone anniversary, a better understanding can help you and your spouse make more informed financial decisions. There are a relatively broad range of tax breaks for married couples. Discover the advantages and benefits, all of which have the potential to lead to significant savings.
The Marriage Tax Advantage
Marriage often provides tax advantages due to how tax brackets and deductions work. There are several key aspects to consider when filing a joint tax return.
- Filing Status: Married couples may choose whether to file jointly or separately. Often, filing jointly results in a lowered tax liability due to lower tax rates and higher deductions.
- Tax Brackets: Married couples filing jointly benefit from lower tax brackets than single-income filers. For example, couples filing jointly with a combined taxable income of $80,000 would pay a tax rate of 12%, while a single filer with the same income would pay a 15% tax rate.
- Deductions and Credits: For tax year 2023, the standard deduction for married couples filing jointly is $25,900, more than double the standard deduction for single filers ($12,950). Married couples are able to deduct more from their taxable income. Additionally, married couples may be able to save money by itemizing their deductions instead of taking the standard deduction. This can be particularly helpful for couples with a lot of medical expenses, charitable contributions, or other deductible expenses.
- Employment Circumstances and IRAs: If one spouse has a low income or is not working, the other spouse can contribute to a spousal IRA on their behalf. It’s also important to note that married couples are eligible for more tax credits than single filers, which can provide significant financial assistance for married couples with low to moderate incomes.
Strategies to Maximize Tax Breaks for Married Couples
To make the most out of the available tax breaks for married couples, consider your unique financial position before finalizing and filing your return. Because not all married couples will benefit or even be eligible for the same tax breaks, it’s always best to run the numbers before deciding to file jointly or separately. The amount of tax savings versus potential tax liability will vary depending on a range of factors, from your total income to allowable deductions and everything in between.
Taking a more strategic and informed approach is a great way to ensure you take full advantage of all available deductions and credits, in order to make the most of your marriage tax benefits. This includes potential tax breaks related to home ownership and medical expenses, to name a few.
Successfully Navigating Tax Breaks for Married Couples
Whether you’re hoping to take advantage of lower tax rates, deductions, or the benefits of owning a home, understanding the nuances and intricacies of these tax breaks is essential. To ensure you’re making the best and most informed decisions, consulting with a CPA is highly advised.
The knowledgeable professionals at Myrick CPA can provide expert guidance to help you optimize your tax filing strategy. Reach out to us to learn more about how tax breaks for married couples can positively impact your financial future.