Tax Implications of Marriage
Getting married can have significant tax implications for you and your spouse. Here are some ways that tying the knot can affect your finances and the tax implications of marriage:
- Filing status: When you get married, you have the option of filing your taxes jointly or separately. Filing jointly can often result in lower tax rates and higher deductions, but it’s important to calculate the tax liability for both filing options to determine which is best for you.
- Standard deduction: The standard deduction is higher for married couples filing jointly than for single filers or married couples filing separately. This can result in a lower tax liability for married couples.
- Income tax rates: Income tax rates for married couples are often lower than for single filers or married couples filing separately. This can result in a lower tax liability for
- Personal exemptions: Personal exemptions were eliminated with the Tax Cuts and Jobs Act, but in previous years, married couples could claim a personal exemption for each spouse, resulting in a lower tax liability.
- Capital gains tax: When you sell an asset that has increased in value, you may be subject to capital gains tax. However, when you get married, you can potentially double your exclusion for capital gains tax on the sale of your home or other assets.
- Estate tax: Married couples can potentially transfer an unlimited amount of assets to each other without incurring estate tax. This can be a significant advantage for married
couples with significant assets.
Getting married can have significant tax implications, both positive and negative. It’s important to understand how tying the knot will affect your finances and plan accordingly. Consider
consulting with a tax professional to determine the best tax strategies for your specific situation