Tight Fist Tip #44: Get Married...Or Divorced

Ok Guys, No Need To Brag

Hey wouldn't it be cool if you could go to the courthouse and fill out some measly paper that would save you hundreds or even thousands of dollars on your tax bills? Well there is, but sneaky tax collectors don't want you to know about it! See, there is this little-known document known as a 'Marriage Certificate' that's pretty cheap to get that is basically a coupon for a big tax deduction. While specific tax rules vary by country, this trick is going to work in all kinds of places that have progressive tax systems. The only catch is that you need a partner to sign up, and in redneck countries (like the US) that partner needs to be of the opposite sex.

Why does this crazy 'Marriage Certificate' exist? From what I understand, it has to do with some vestigial concept of love and coupling that was popular in colonial times. I'm not really sure what that's all about, but for some reason it still exists in the tax code for Tight Fisters to take advantage of.

The Art of Deduction

Now, this trick isn't going to work for everyone. The reason the tax deduction exists is because when you get married the sum of your income and your partner's income is used to calculate the tax rate. In a progressive tax system (which most countries have), this means you will pay a greater percentage of your income once you are married. To dull this blow married couples get a bigger tax deduction. But if one partner doesn't work or makes very little, getting married will not bump you up a bracket but you will get the higher deduction. Score! So if you are a big earner, find a slacker without a job to marry for the biggest payday. If you are a slacker, find a money maker and agree to split the difference to get some free moola from Uncle Sam.

Plus, if you live in a backward country without public health care (like the US), this magical Marriage Certificate allows you to get on your partner's job-sponsored health insurance, which costs way less than buying it yourself. Double score!

And what if you make some good money and want to marry someone similarly income-heavy? Well don't, dufus! But fortunately, if you've already made stupid decision, undoing your mistake is super-easy. Again, just hop on down to the courthouse and undo your screw-up (it's called a 'divorce'). See, wasn't that easy?

Man, keeping money away from the taxman has never been so easy. But don't blow it all on your wedding, ok?

By the way, thanks to Barbara for this tip. Can't wait for your wedding!
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Questions about frugality? The Tight Fist can help. thetightfist@googlemail.com