Some couples spend years on the fence about whether to end their marriage. One of the biggest considerations – after parenting-related factors – is how the decision to get a divorce would affect them financially.
This fact shouldn’t be surprising, considering that finances are what bring some couples together – under the same roof, that is – in the first place. According to a Pew Research Center study, money is a common consideration when two people are deciding whether to live together. The study revealed that making “financial sense” was a major reason for 13 percent of people who got married – and 38 percent of unwed people who moved in together.
Getting married requires serious consideration, and so does divorce or legal separation. Couples who opt for any big step in their relationship generally want to understand the financial consequences that await them.
When Staying Marriage May Bring Financial Downsides
There’s no simple formula for determining the price tag of a relationship decision. Sharing the bills with someone can certainly save you money, but getting married also comes with a cost. The average wedding in 2020 cost the lucky couple $19,000. And anyone who has ever planned a big wedding knows that the figure can easily climb much higher. And while there can be financial advantages to tying the knot, including at tax time, even those taxes can be a double-edged sword that pushes a couple into a higher tax bracket.
Some couples who put off divorcing to avoid the cost of divorce may end up paying in other ways. While the biggest downsides for an unhappy couple who remains married might be emotional ones, whether that decision is the right one depends on your particular circumstances. And while it’s not always easy to see the cost of being unhappily married, including the loss of opportunities you might otherwise enjoy, there might still be a financial downside to putting off the inevitable.
Potential Financial Benefits of Staying Married
Being married can come attached to some possible financial benefits, as well. Two common factors that couples consider are:
Tax Benefits in Illinois
When it comes to paying your taxes, there are several potential tax benefits that unmarried people typically don’t enjoy:
Tax Deductions. The standard deduction for married couples is twice as much as the deduction for individuals. In 2022 it is $25,900 for married couples. This is the amount a couple filing jointly can deduct from their combined income before income tax is applied. Speak with a lawyer or accountant if you want to know how your marriage status might impact your taxes this year or next.
Other Tax Perks. You might enjoy other tax perks while married, including a higher threshold on the sale of a home before capital gains taxes kick in. Furthermore, married people are typically allowed to give their spouse valuable gifts without paying taxes on them. An unmarried (or divorced) person gifting someone jewelry, art, or anything else valued above $15,000 might be subject to a gift tax, requiring them to file a gift tax return.
Health Insurance and Other Possible Benefits (Retirement, Social Security, Military)
Being married may give you more options in terms of retirement benefits, as well. There is generally an advantage when it comes to collecting Social Security benefits, for example. Depending on your circumstances, the government may find other ways to reward you for staying married – such as one spouse remaining on the other’s health insurance policy or being able to claim social security benefits or military benefits.
A Divorce Lawyer Can Explain Spousal Support, Asset Division & Other Financial Impacts
When married couples split up, one spouse is often required to pay spousal support (also called maintenance or alimony) to their ex. This can be viewed as a positive or negative, depending on your point of view. There may be other financial questions since combined marital assets will need to be divvied up. A legal separation is an option for couples who want to take a step toward divorce but aren’t yet ready to cross that line.
Rather than making assumptions about how your divorce might impact your pocketbook, speak to an expert at the Law Offices of David A. King, P.C. As experts in all areas of divorce law, our attorneys work to ensure a fair outcome for all of our clients. Call us at 630-504-7210 or contact us online to discuss the next steps.