When you get married life as you know it begins to change and mostly for the better. Saying “I do” can help you live longer, sleep better and you’re less likely to be depressed. Marriage also comes with numerous financial benefits including special discounts and money-saving opportunities. Let’s look at how tying the knot can positively impact your finances.
You have someone to split the bills with
When you live alone, you’re responsible for paying all the bills. Housing, groceries and utilities are all on you. An obvious perk of getting married is you don’t have to do it by yourself anymore. Since both parties will be calling the place home you can start sharing the costs. If dividing the bills 50/50 doesn’t work, you can always split the bills proportional to income.
You’ll save money on car insurance
Married people are considered to be safer drivers and less likely to get into accidents than their single counterparts. Therefore, they’re rewarded with lower insurance rates. If both partners have good driving records, they can save even more money by combining policies. Most insurance companies offer a multi-car discount for having all your vehicles on the same policy.
You can claim your spouse’s Social Security benefits
Nine out of ten adults age 65 or older receive Social Security benefits. Typically, you earn credits for working and paying Social Security taxes. Once you have 40 credits which is the equivalent of working 10 years, you can qualify for retirement benefits. As a married person you have the option of claiming your own benefit or up to half of your spouse’s full retirement amount. This is can be extremely beneficial for those who have never worked or earn significantly less than their spouse.
Nonworking spouses can open an IRA
Usually you can’t contribute to an IRA if you don’t earn any money. However, getting married is a game changer. The working spouse can contribute to an IRA on behalf on the nonworking spouse. The spousal IRA can be either a Roth or traditional IRA and is subject to the same contribution limits as everyone else. For 2019, you can contribute up to $6,000. Plus, an additional $1,000 if you’re 50 or older. You must file a joint tax return to qualify. Pre-register now with ezTaxReturn.com and you’ll receive a special discount when you file your taxes next year.
You’re entitled to a higher standard deduction
Most people claim the standard deduction when they prepare their tax return. It’s the easiest way for taxpayers to reduce their taxable income. If you take a peek at the standard deduction rates, you’ll see that married couples can save twice as much as single taxpayers. The standard deduction is worth $24,400 for married couples filing a joint return and only $12,200 for single filers.
Bigger tax breaks when you sell your home
Normally when you sell your home up to $250,000 of the profit is tax-free. However, married couples can walk away with even more money. They’re allowed to exclude up to $500,000 in capital gains. You’re eligible for the exclusion if you own your home and used it as your primary residence for at least two of the last five years. The time doesn’t have to be consecutive. You will not qualify if you’ve excluded profits from another home sale within the last two years.
No need to worry about gift taxes
Married couples can transfer an unlimited amount of money to their spouse without thinking twice about it. The money doesn’t have to be reported and it isn’t subjected to gift or estate taxes. For everyone else, you can only gift up to $15,000 per person annually.