Millennial Money: 4 ways married couples can use tax breaks to build wealth

abcnews.go.com:

Married couples can benefit from a range of tax breaks in the form of credits and deductions

“Two is better than one” is an old adage that translates to finances, too. Two incomes can go much further than one, especially between married couples.

People who say “I do” also have access to various tax breaks that can give them a financial edge when it comes to building wealth. For instance, married couples filing their taxes jointly get a standard deduction of $27,700 in 2023, while single filers get a $13,850 deduction.

How can married couples act on the many tax breaks they have access to and use them to build wealth? Two certified public accountants share a few strategies for couples to consider.

STRATEGY 1: INVESTING

When married couples get a tax deduction or tax credit, there’s an opportunity to invest that extra money. There are a string of ways to invest the money, but couples could benefit from investing in themselves, says Sheneya Wilson, a CPA and founder of Fola Financial in the Bronx in New York City. Couples may choose to use their tax savings to invest in courses that improve their skills, market value and salaries, she says.

Retirement accounts like 401(k)s, IRAs or regular brokerage accounts are also an option for couples. Investing those extra dollars from tax breaks means couples have more money that can potentially grow and enjoy the benefits of compound interest.

Wilson adds that married folks can also consider alternative investments, such as commodities, gold, silver, royalties or music catalogs.

Ultimately, couples can choose investments that align with their goals and legacy.

“The best investments are going to be in line with how that person wants to leave an influence on the world,” Wilson says.

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