5 Tax Benefits That Come With Marriage


Estate Transfers

First, a caveat. The federal estate tax (a.k.a. the "death tax") only applies to estates valued over $5,250,000 in 2013 [source: Internal Revenue Service]. The tax is levied on the transfer of large and valuable estates to children and other heirs. If you die with assets valued at less than the $5.25 million mark, then the feds don't even make you file an estate tax return.

But if you find yourself in the enviable/unenviable situation of dying with a sizable nest egg, it pays to be married. You can transfer an unlimited amount of assets to your spouse without paying a cent in federal estate tax [source:Weston]. The IRS calls this the marital deduction.

The same is true for the gift tax. While you're living, you can only give away a certain amount of money each year to each member of your family -- $14,000 since 2013. This is the IRS's way of stopping rich uncle Morty from evading estate taxes by giving away all of his cash before he dies. But gifts for spouses are completely exempt from the gift tax. That would explain Aunt Edna's jewelry collection.

For our next item, we'll look at the tax benefits of marriage when it comes to saving for retirement.