Happy Valentine’s Day week to all of the lovebirds out there! Whether you’re enjoying a night out on the town or staying in for a movie night, we want to give you even more reasons to celebrate with your loved one with…you guessed it: tax benefits!
So, grab your significant other and read up on some of the perks of being coupled up come tax time.
Married couples filing jointly generally benefit from lower income tax rates than couples filing separately. This is especially attractive to couples with differing levels of income, but this is not the only way that marriage can have a positive impact on the size of your tax bill. A number of tax benefits may only be available to couples who file jointly, including:
Unlimited Marital Deduction
One of the most powerful tax benefits available to married couples is the unlimited marital deduction allowing assets to be transferred to a surviving spouse tax-free. Don’t ignore this! A freshly married couple in their mid-20’s might not be thinking about estate planning, but as the years pass, it will increasingly loom large in their future decision making.
Larger Tax-Free Gifts
Married couples also get more bang for their buck when it comes to the gift tax exclusion. Currently, there is an annual federal gift tax exclusion of $15,000 per spouse for 2018 (meaning your recipient can “immediately and without restriction use, possess or enjoy the gifted property” without tax consequence to you) and the gift tax exclusion applies to gifts for each donee. As a married couple, you get to combine this exclusion and can gift $30,000 tax-free per donee. So, this means that a married couple can gift up to $60,000 to two grandchildren tax-free.
As your wealth grows, be mindful of ways to use the gift tax exclusion to strategically transfer assets to loved ones (or between each other).
You Can Qualify for Earned Income Tax Credit
As a married couple filing jointly, you may have an easier time qualifying for Earned Income Tax Credit since qualifying income for married couples can be more than someone that is single (up to $54,884 married filing jointly, up to $49,194 single). This is really important to keep in mind since the Earned Income Tax Credit can be up to $6,431 for a married couple with three kids.
Don’t worry about knowing these tax laws. TurboTax will ask you simple questions about you and give you the tax deductions and credits you are eligible for based on your entries. If you still have questions, you can connect live via one-way video to TurboTax Live CPA or Enrolled Agent with an average of 15 years experience to get your tax questions answered. The CPA or Enrolled Agent can also review, sign and file your tax return.
So get started today! You can snuggle up and get your taxes done without leaving the house.