How to save on taxes after the wedding
Did you know that marriage also offers real tax advantages? You can actually save on taxes by getting married – and it's completely straightforward. We'll answer all your important questions about taxes in marriage, from choosing the right tax bracket to special tax breaks. You'll get practical tips you can implement immediately, learning not only how to save money but also how to save time and stress!
By the way: Registered civil partnerships are treated the same as marriages for tax purposes. All tax benefits apply to everyone who has officially said "I do."
Your most important tax advantages at a glance
- Saving money by changing your tax bracket : As a married couple, you can change your tax bracket. This can cost you less in taxes.
- Sharing taxes: This is called joint taxation for married couples. You will then usually pay less tax together than you would alone.
- Joint tax return: If you file your taxes together, you can get more money back overall.
- More tax allowances: This is an amount you can earn without paying taxes on it. As a married couple, you can take advantage of this twice.
- Cheaper insurance: Some insurance policies are cheaper for married couples.
- More freedom with gifts and inheritance: In marriage, you can give away or inherit more without paying taxes.
- Pay less tax on investments: You can distribute your capital gains in such a way that you pay less tax.
- Double savings allowance: After the wedding, you have to pay less tax on interest.
- Two apartments: If you have two apartments for specific reasons, you can also save on taxes here.
- Pro tip: If you get married before December 31st, you will be considered married for tax purposes for the entire year retroactively.
In the FAQ you will also find answers to many other questions about your tax benefits.
Saving money by changing your tax bracket – how to find the right tax bracket after your wedding
Choosing the right tax bracket after your wedding can give your household more financial flexibility.
What is a tax bracket?
A tax bracket is essentially a "tax label" that tells the tax office how much of your salary should be withheld for taxes. In Germany, there are six tax brackets (I to VI), and each has its own specific characteristics.
Why is the tax bracket important?
Your tax bracket affects how much income tax is directly deducted from your salary. This means that, depending on your tax bracket, you'll have more or less net pay at the end of the month. Furthermore, your tax bracket can also influence the amount of wage replacement benefits you receive, such as unemployment benefits or parental allowance.
What options do I have?
As a married couple, you essentially have two combinations available: IV/IV or III/V.
Tax combination IV/IV
This option is good if you both earn roughly the same amount. It's also known as the "factor method" and ensures that both partners pay approximately the same amount of tax.
The factor method is a special variant of tax class IV/IV, in which the tax office adjusts the tax deduction so that you have to pay less or even no additional tax at the end of the year. It ensures that both partners have roughly the same tax burden, but with an optimized deduction.
Practical example
Let's assume both of you earn €50,000 a year. If you choose tax class IV/IV with the factor method, the tax office will adjust the tax deduction so that you have to pay less at the end of the year.
Tax class combination III/V
This combination makes sense if one of you earns significantly more than the other. The higher-earning partner chooses tax class III and pays less tax, while the lower-earning partner chooses tax class V and pays more tax.
Practical example
Imagine you earn €4,000 a month and your partner earns €2,000. If you choose tax classes III/V, you could have about €200 more in your pocket at the end of the month. That adds up to an extra €2,400 per year.
How do I change my tax bracket?
Changing your tax bracket is easier than you think. You just need to submit an application to the tax office. This is usually done online and only takes a few minutes.
→ You can fill out the application for a change of tax class directly at the online tax office here!
Sharing taxes – How joint taxation for married couples works
Joint taxation of married couples is a tax regulation that applies in Germany to married couples and registered civil partnerships. It allows the combined income of both partners to be added together for tax calculation purposes and then divided in half.
Why is joint taxation of married couples beneficial?
Joint taxation of married couples can be particularly advantageous if one spouse earns significantly more than the other. In this case, the tax benefit of marriage can be substantial. The greater the difference in income, the greater the gain. It balances the tax burden between partners and ensures that you, as a couple, pay less tax overall.
How does it work?
Let's say you earn €60,000 a year and your spouse earns €40,000. Together that's €100,000. With joint taxation for married couples, this income is halved to €50,000, and then taxes are calculated on that amount. This tax is then doubled and is usually lower than if each of you paid taxes separately.
What do you have to do?
To benefit from this tax advantage, you must file a joint tax return.
How does this relate to the tax brackets?
Joint taxation and tax brackets are two different mechanisms, but both aim to optimize the tax burden for married couples. Joint taxation is usually done once a year when filing your tax return. The tax brackets you choose, on the other hand, affect your monthly income.
Is joint tax filing always worthwhile for married couples?
Joint tax filing for married couples isn't always worthwhile and isn't the best option for every couple. There are situations where joint filing can even be disadvantageous. Here are some points to consider:
- Similar incomes: If both partners have similar incomes, joint taxation often only brings minor tax advantages.
- Progressive tax system: Germany has a progressive tax system. This means that the more you earn, the higher the tax rate. Therefore, if both partners earn roughly the same amount, the tax advantage of joint taxation is often minimal.
- Social benefits: The amount of certain social benefits, such as unemployment benefits or parental allowance, can be influenced by taxable income. In some cases, joint taxation of married couples can be disadvantageous here.
- Tax bracket selection: The choice of tax bracket can affect your monthly net income. Sometimes it makes more sense to forgo joint taxation for married couples and instead choose a more favorable tax bracket.
- Individual factors: Other individual factors such as children, other income or tax deductions can influence the decision.
Joint taxation for married couples can be a great way to reduce your tax burden. Tax software or a tax advisor can quickly tell you if it's worthwhile in your case and how much you could save.
Joint tax return – More money back through teamwork
As you probably guessed, filing a joint tax return can bring you financial advantages, not just when using income splitting for married couples. You can often get a larger tax refund than if each of you filed your tax return individually.
What will change?
Filing your taxes jointly allows you to deduct certain expenses more effectively. For example, if one of you has high advertising costs or special expenses, the other benefits as well.
What is predisposition?
Tax assessment is a technical term from tax law. It refers to how the tax office assesses your income for tax purposes. In the case of joint assessment, the income of both partners is combined and considered as a single unit, which can offer tax advantages.
A practical example
Let's say one of you is a student with high expenses for books and travel, while the other earns a full income. By filing a joint tax return, you can deduct these expenses and thus reduce your tax burden.
How do you use this advantage?
To benefit from joint tax assessment, you must indicate in your tax return that you wish to file your incomes jointly. Tax software or a tax advisor can help you make the most of all the advantages.
More tax advantages through tax allowances – how married couples benefit
Tax-free allowances are fixed amounts of money you can earn each year without having to pay taxes on them. If you get married, these tax benefits double for you and your spouse.
What exactly are tax allowances?
A tax-free allowance is a specific amount that is exempt from taxes. This means that up to this amount, you don't have to pay any taxes to the tax office. For example, in Germany, there is a basic tax-free allowance, which was €10,908 for the year 2023. Up to this amount, your income is tax-free.
How do married couples use this tax advantage?
By getting married, you as a married couple can claim the tax allowances for both partners. This means the basic tax allowance of €10,908 applies to each of you, totaling €21,816. If one of you earns less or has no income at all, the unused allowance of one partner can be transferred to the other.
A practical example
Let's say you earn €50,000 a year and your spouse currently has no income because they are on parental leave. By getting married, you can both utilize the basic tax allowance of €10,908, which totals €21,816. This means that the first €21,816 of your income is tax-free!
How do you use this tax advantage?
To benefit from the higher tax allowances, you need to file a joint tax return. There you can enter the allowances, and the tax office will take them into account when calculating your taxes.
Cheaper insurance – More protection for less money
Insurance is an important component of financial security. Spouses can often benefit doubly here: through better terms and lower premiums.
What's changing with insurance?
Some insurance providers offer special rates for married couples. This applies, for example, to liability, household contents, or car insurance. By combining policies, you can often benefit from discounts.
A practical example
Imagine you both own a car. If you insure both vehicles under a joint car insurance policy, you can often receive a "partner discount." This can significantly reduce your annual insurance costs.
How do you use this advantage?
To benefit from more favorable conditions, you should review your existing insurance contracts and, if necessary, obtain quotes for couples' policies. A comparison website or an insurance broker can assist you with this.
More freedom with gifts and inheritances – further tax advantages
The period after the wedding is also the best time for very expensive gifts. Marriage is very worthwhile, especially when it comes to gifts and inheritances.
Gifts between spouses: What changes?
When you get married, you can exchange gifts worth up to €500,000 tax-free. By comparison, unmarried couples can only give each other €20,000 tax-free. So, thanks to marriage, you can transfer larger assets to each other tax-free.
Inheritances after marriage
If one of you were to die, the other could inherit up to €500,000 tax-free. Furthermore, if you own a house together and the surviving partner continues to live there, they don't have to pay inheritance tax on it. If you are not married, you can only inherit up to €20,000 tax-free. And what about the house you own together? The surviving partner has no automatic claim to it unless it's stipulated in a will.
A practical example
Let's say you want to give your spouse a large sum of money or a property. Because you're married, you can make this gift tax-free up to €500,000. That's a huge advantage compared to the €20,000 limit that applies to unmarried couples.
How do you use these advantages?
To benefit from these tax allowances, it is important to take the necessary steps with a notary and the tax office. In the case of inheritances, a will should also be in place to regulate the distribution of the assets.
Investments – Investing and saving on taxes
Investing is always a smart move when the opportunity arises. But as a married couple, you can optimize the whole thing for tax purposes.
What changes regarding investments?
If you're married, you can split capital gains so that you pay less withholding tax overall. (Withholding tax refers to the tax on profits from interest and shares.) This is particularly beneficial if one of you has a lower tax rate.
A practical example
Let's assume one of you has a high income and the other a lower one. If the partner with the lower income holds the investments, less tax will be levied on the capital gains.
How do you use this advantage?
To take advantage of this tax benefit, you need to open a joint account or securities account at the bank. Then you can distribute the capital gains in such a way that they are tax-efficiently distributed.
Double savings allowance through marriage
As a married couple, you can also keep more of your capital income, thanks to the doubled savings allowance.
What will change?
Normally, everyone has a savings allowance of €1,000 per year (from 2023). This is the amount you can earn in interest, dividends, or other capital income without paying taxes on it. If you are married, you can double this amount and jointly earn €2,000 tax-free.
A practical example
Imagine you both have a savings account and receive interest on it. Normally, each of you would have to pay taxes on interest income exceeding €1,000. But because you're married, you can receive up to €2,000 in interest tax-free.
How do you use this advantage?
To take advantage of the doubled savings allowance, you need to submit an exemption order to your bank. This is usually done online and is quick and easy. A tax advisor or tax software can help you ensure all the details are correct.
Two apartments – double the address, double the advantages
Sometimes it makes sense to have two homes, for example because of work or other obligations. You can also save on taxes this way.
What will change?
If you own two residences, you can often deduct the costs of the second residence from your taxes. This is especially true if one of you needs a second place to live for professional reasons.
A practical example
Let's say one of you works in another city during the week. You can claim the rent and travel expenses for this second residence on your tax return, thus reducing your tax burden.
How do you use this advantage?
To benefit from the tax advantages, you simply need to include the costs in your joint tax return.
Pro tip: Get married just before the end of the year and save on taxes retroactively!
That's right! In Germany, there's a special rule that allows you to change your tax brackets retroactively for the entire year if you get married before December 31st. This means that you and your partner can take advantage of the tax benefits of marriage for the whole year, even if you only said "I do" in December.
How does that work?
Imagine you get married on December 30th. You can immediately apply to the tax office for a change of tax bracket and retroactively claim the more favorable tax bracket for the entire year. This can lead to a significant tax refund when you file your tax return for that year.
Why is this so advantageous?
This tip is especially useful for couples where one partner earns significantly more than the other. By switching to a more favorable tax bracket, you can receive a substantial tax refund. And the best part: you can claim this refund for the entire year, not just for the period after the wedding.
Is there a catch?
There's really no major catch, but it's important to submit the application for a change of tax bracket as soon as possible after the wedding to take full advantage of the benefits. Also, keep in mind that this regulation only applies to marriages that took place in Germany and to individuals who are subject to German taxation.
How do you use this advantage?
- Getting married before December 31st: The key to this insider tip is that the wedding must take place before December 31st.
- Application for a change of tax bracket: Once you are married, submit an application for a change of tax bracket to the tax office. This can often be done online.
- Filing a tax return: With your next tax return, you can then claim the advantages of the new tax class for the entire year, as if you had been married all year.
Frequently Asked Questions
How do children affect the financial benefits of marriage?
Children are not only a joy, but also bring tax advantages. For example, you can apply for child benefits or take advantage of child tax allowances. This can significantly reduce your tax burden.
Are there special regulations for retired married couples?
Yes, even as a retired couple, you can benefit from tax advantages. For example, you can divide your pension income in such a way that you pay less tax. A tax advisor can help you get the best possible outcome.
What happens to financial benefits in the event of separation or divorce?
Several things change when you separate or divorce. For example, joint tax assessment for married couples no longer applies. Your tax bracket often changes as well. It's important to get informed early to avoid any disadvantages.
What documents do I need to take advantage of the various benefits?
It depends on the specific benefit. For example, to change your tax bracket, you need an application to the tax office. For insurance benefits, a marriage certificate is often sufficient.
What about international marriages and German tax laws?
International marriages can be complicated, but generally, German tax laws apply if one of you is a taxpayer in Germany. However, there are also double taxation agreements with many countries.
Do I need to adhere to certain deadlines to receive the benefits?
Yes, deadlines do have some advantages. For example, the application for a change of tax bracket often has to be submitted by November 30th of the previous year.
What tax considerations should self-employed individuals keep in mind when married?
As a self-employed person in a marriage, there are many ways to save on taxes, for example by choosing the right legal structure or by using joint tax filing. A tax advisor can give you specific tips.
Can I retroactively claim benefits I've already missed out on?
Yes, you can claim some benefits retroactively. For example, you can file a tax return up to four years retroactively.
Can wedding expenses be deducted from taxes?
Unfortunately, wedding expenses are generally not tax-deductible. But hey, marriage brings many other financial advantages!
How do alimony payments affect the financial situation?
Maintenance payments can be deducted from taxes. This applies to both the payer and the recipient. However, the rules are complicated, so it's advisable to seek professional advice.
What regulations apply to registered civil partnerships compared to marriage?
Registered civil partnerships are treated the same as marriages for tax purposes. This means you can take advantage of the same benefits, from tax brackets to tax allowances.
