At last the big day has come: Wedding. It’s a big party. The newlyweds, friends and relatives in a festive mood. Champagne, buffet, music. The bill is accordingly high. But the costs are quickly recovered. As a married couple you can save a lot on taxes and insurance. Here we tell you where and how.
1. pay taxes together – with spousal splitting
“Spousal splitting” is something you’ve heard a lot about, but as a single man, didn’t you care? After saying yes, you should pay a little more attention to it – because it can be worth it. Especially when one spouse earns significantly more than the other.
Behind the spouse splitting is the “joint predisposition”. This means that not everyone pays taxes separately, but both pay taxes together as a couple. Which income then applies? Neither the higher or lower. Instead, the calculation goes like this:
- The taxable income of both partners is first added together and then halved.
- Then it is calculated how much tax is due on half the income.
- The calculated tax amount is doubled: this is the amount of tax you have to pay as a couple.
And that should be cheaper? Yes. Not always, but in many cases married couples get away with less tax this way. Because the higher your earnings, the higher the percentage of tax you have to pay. However, when a higher and a lower income are virtually combined, the lower income “pushes” the tax rate of the higher one down. The bottom line is that the couple pays less tax than if they both pay tax separately.
By the way: If you decide to pay taxes together, it will apply for the whole year in which you got married. Your wedding is on 31 December? Then you can reduce your tax burden for the whole of the previous year through joint taxation.
2. optimally combine tax classes
As newlyweds, both partners initially automatically end up in tax class IV. However, this is not the best choice for every couple. You should therefore check whether you might pay less with another combination and, if necessary, have the tax classes changed by the tax office.
If both partners earn about the same amount, the classification in tax class IV is optimal for both. Also suitable: “tax class IV with factor”. In this case, the effect of the spouse splitting on the tax return is virtually already taken into account in the monthly payroll.
But what if one earns significantly more than the other? Starting at a ratio of 60:40, it is usually worth combining tax classes III and V. The partner with the higher salary chooses tax class III, the other tax class V. The result: the lower salary is taxed more heavily, but the higher income is taxed less.
By the way: If you are expecting a new generation of employees, you should consult a tax advisor. Because the parental allowance (just like unemployment benefits, for example) is based on net salary. Therefore, a change of tax class may be worthwhile under certain circumstances. However, you must do this at least seven months before the birth of the child.
Married people can change their tax class once a year. As a rule, the application must be submitted to the tax office by 30 November.
What is worthwhile and when? Simply recalculate!
3. use higher lump-sum savings amount
You have invested money in fixed assets, for example in shares, in a call money account, in a building society savings contract? No matter where your money is: taxes are due on the interest or dividends. But not on the entire amount. You may keep all profits below the so-called saver’s lump sum in full – tax-free. An exemption order is required for this.
What does this have to do with your marriage? It’s simple: for individuals, the lump-sum savings amount is 801 euros. For married people who assess their tax together, it is twice as high, i.e. 1,602 euros. It does not matter whether both partners have actually invested money. In other words: If only one of the two has invested his money firmly, he can now keep twice as much profit tax-free as before the marriage.
4. insurance at a lower price
At the latest after the honeymoon you should take a look at the insurance documents. Because some policies may be able to be combined and thus reduce costs. These include, for example
- the legal expenses insurance,
- Personal liability,
- Accident insurance,
- International health insurance.
You each have a policy? Then you can cancel one of the two contracts (for example, the younger one or the one with the lower insurance coverage) and then include your partner in the remaining policy. With some insurance policies, a wedding is considered a reason for early termination. Otherwise, you must adhere to the regular cancellation period.
Does either of you also have a private pension insurance or life insurance? Then the partner should be registered as beneficiary. If not: You should consider a term life insurance at the latest when there are children on the way. So that the surviving dependants are provided for in the event of an accident.
One of the two partners stops working, for example to look after the next generation? Then the other partner can insure him or her in his or her statutory health insurance free of charge – and the children as well.
And: not only with joint insurance, but also with a joint account and a partner credit card, a couple can save a few fees.
5. tax-free gifts
Often large amounts of money move back and forth between lovers. As a generous gift. For security. As starting capital for your own little shop. But beware: taxes are payable on gifts of money. Only amounts up to 20,000 euros are tax-free.
After the wedding it looks completely different: Now you may give yourselves among yourselves even 500,000 euros, without a cent gift tax becomes due. Waiting until after the big day can therefore be worthwhile.
By the way: The tax-free amount of 500,000 euros also applies if one of the spouses bequeaths such sums to their surviving partner.