The Financial Benefits of Marriage

While money should not be a motivating factor for getting married, there is no harm in reaping the benefits that come with tying the knot. And in regard to finances, there are plenty. Love and money do go together, as it turns out.

There are a few caveats that make marriage not-so-favorable for certain couples, but generally speaking, the positives outweigh the negatives. So, if you’re planning to get hitched, you might want to see how your new union could benefit both your and your spouse’s financial standing.

Disclaimer: Since laws vary from country to country, this article will focus solely on US-based marriages. However, most of the benefits covered here come in some shape or form in other locations as well.

Taxes

Income taxes are far too complicated of a topic to cover in just one article, so do your own research or consult a financial advisor. But the basic message is that you are likely to save on your tax bill by being married. This isn’t always the case, however. If both partners are high earners, filing jointly as a married couple could push you into a higher tax bracket (meaning a higher percentage of your income will go to taxes). On the other hand, if one partner earns significantly less or no income, the overall tax bill will go down.

Filing separately can be useful in some cases, but could affect your ability to tack on various deductions (such as child tax credits) or affect IRA contribution limits. These can save you money in the long run. Hence, once again, if you see your tax bill come out at an unexpected amount, it may be wise to talk to a professional about how to handle your situation.

Health, Auto and Home Insurance

You can start saving money almost immediately after the wedding by simply giving a quick call to your insurance providers. Health insurance should come to mind first. Most family plans (which cover two or more people) cost notably less than two individual plans. In addition, married couples can deduct their combined insurance premiums from their tax bill (versus being able to deduct only one’s own).

Auto and home insurance providers can also save you hundreds of dollars if you tell them you got hitched. There could also be additional savings by having multiple cars under one plan. Having said that, this is not true for all providers so if yours doesn’t offer you a discounted rate, it is safe to start shopping around until you find one that suits you.

Social Security

If you’re a younger couple, social security might not be on your mind but it is necessary to know if you’re planning on staying in a relationship for a while, as there are tons of financial social security benefits that come with being legally married.

For starters, when you start receiving checks, you will either collect your own payment or 50% of your spouse’s — whichever is bigger. So, if your spouse has a social security check that’s more than twice yours, you will be better off. And should the high-earning spouse pass before the low-earning spouse, the low-earning spouse will be eligible for 100% of the social security of their partner.

Federal and Large Company Employees

If either you or your spouse works for a government agency such as the military, there are plenty of benefits both financial and non-financial that you can take advantage of if you’re married. Family separation pay, educational grants, and home loan discounts are just some examples. It’s not just federal agencies, either, that offer such benefits. Plenty of big-name companies such as Google offer similar perks, so it’s worth looking into your and your spouse’s employer as you might be surprised what you will find.

Capital Gains on Property

Being married doesn’t really give you many benefits in terms of buying property. Lenders will assess each person individually when offering a loan, not regarding marital status. However, there is a small benefit when it comes time to sell. As a married couple with joint ownership, you will see double the capital gains exclusion (so you pay taxes on anything over $500,000 instead of $250,000 if you were single), should you sell your home.

Estate Taxes

Speaking of property…as of 2022, a married couple is exempt from paying any estate tax of up to $24.12 million in case of their partner’s passing. In other words, most of us won’t have an inheritance tax to deal with. And should you be lucky to inherit an estate worth more than that, further taxes can be avoided via gifts and trusts.

But Wait — There’s More!

The financial benefits of marriage don’t end here. Depending on your individual situation, you might find yourself in an advantageous scenario by other means. If you have a decent net worth or high income and you’re serious about saving money, it is best to hire a tax professional or financial advisor to see how you can benefit from your new union. But in the meantime, don’t forget that it’s not all about the money—and enjoy being united with your true love!

The post The Financial Benefits of Marriage appeared first on Weddingbee.

Author:

Leave a Reply

Your email address will not be published.