3 Tax Tips for Couples With No Kids

This post may contain affiliate links which may compensate us based on your interaction. Please read the disclosures for more information.

Even without kids, it’s possible to cut your tax bill. Here’s how to eke out your fair share of tax savings. [[{“value”:”

Being a couple with no kids has a number of advantages. On a basic level, you can sleep in on a Saturday morning without having to set an alarm for the crack of dawn to shuttle little ones to soccer, gymnastics, and so forth. And you also don’t have to spend your evenings breaking up fights between siblings and entertaining children when you’d rather be kicking back and relaxing after hours of work.

Financially speaking, being kid free also offers a world of benefits. You have an opportunity to pad your savings account because you’re not spending half of your income on child-related expenses.

Now you might assume that being child free puts you at a disadvantage when it comes to taxes. But actually, there are a host of tax breaks kid-free couples can benefit from. Here are some tips for maximizing those.

1. Contribute as much as you can to a traditional retirement plan

When you have kids, expenses like extra food, medication, clothing, and child care can monopolize a fair share of your income. As such, it can be hard to contribute to an IRA or 401(k) plan in a meaningful way.

But if you don’t have kids, you may have a prime opportunity to fund an IRA or 401(k), or even potentially max out, depending on your income. And the more money you put into one of these retirement plans, up to the annual allowable limit, the more of your income you can shelter from taxes.

This year, IRAs max out at $7,000 for savers under age 50 and $8,000 for those 50 and older. With a 401(k), you can put in up to $23,000 if you’re under the age of 50 and up to $30,500 if you’re 50 or older.

So let’s say you’re married with a joint income of $150,000 this year. That puts you in the 22% tax bracket. If you and your spouse put a total of $15,000 into a traditional IRA and/or 401(k) this year, you’ll enjoy $3,300 in tax savings. And while that is a lot to put into an IRA or 401(k), allocating 10% of your combined income for retirement purposes may be doable if you’re not paying for things like daycare.

2. See if there are tax credits you qualify for

It’s true that certain tax credits are designed to ease the burden on parents with kids. But not having kids doesn’t mean there are zero credits available to you.

If your income is lower, you may be eligible for the Earned Income Tax Credit. And if one of you is in school for a graduate degree — something you may have time for in the absence of having kids — then you may be eligible for the Lifetime Learning Credit or the American Opportunity Tax Credit.

3. Set aside pre-tax dollars for healthcare

Just because you don’t have kids doesn’t mean you won’t spend a fair amount of money on healthcare expenses. And it pays to allocate pre-tax dollars for those expenses to shield additional income from the IRS.

If your company offers a flexible spending account, that’s one option to explore, though you’ll usually need to sign up for one of these accounts during your company’s fall open enrollment period. You can also see if you qualify for a health savings account, which may be the case if you’re enrolled in a high-deductible health insurance plan. You can change your health savings account contribution at any time during the year, so it’s not too late to allocate funds for 2024.

You don’t need to be a parent to save money on your taxes. Use these tips to eke out savings and pay the IRS less.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

“}]] Read More