June through September is peak wedding season, and we’re betting you know someone who is getting married this summer – or has an anniversary. This is often the most expensive event a couple will plan, and if it was possible to save some money through tax breaks of all things, you’d want to know! From the venue to the food, the dress and the flowers, there are available tax deductions in more places than you might think.
When it comes to tax planning as newlyweds, there are some things to keep in mind, too, like whether to file jointly or separately.
If you know someone who’s about to tie the knot (and maybe that’s you!) read on for ways to save money on the wedding expenses and how to get started on the right foot with taxes after the nuptials.
Tax Savings: It’s All About Giving Back …
Most of the tax savings associated with wedding expenses come down to one denominator: charitable contributions. Here is a list of items that can be donated to charities, and as a result, written off as charitable tax deductions. In any case, remember to get a receipt for the donation.
After the big day, donate the wedding dress to a qualified nonprofit organization. Not only will the bride receive a tax break, but she’ll be helping someone else either afford her own wedding dress or its proceeds will go toward a worthy cause, like funding breast cancer or other terminal illnesses. There are two organizations locally who resell bridal gowns at a deeply discounted rate, then donate the proceeds: Fairytale Brides On a Shoestring in Rockville, MD and St. Anthony’s Bridal in Fairfax, VA.
Flowers can be donated to local women’s shelters, homeless shelters, nursing homes, and similar organizations. Another potential option is to give the flowers back to the floral shop for them to repurpose and sell at a deeply discounted rate, then donate the proceeds to charity. ReBloom and Petals With Purpose are two examples of what other cities are already doing.
Some couples will take the leftover food and split it among family and friends. Couples who want the buffet to go a little further tax-wise can also donate the leftovers to local food pantries or homeless shelters. Simply ask the caterer to package any leftovers, then deliver to the nonprofit.
Most couples opt for small tokens of appreciation to show guests how much their presence was valued. Instead of candy, take the amount of money that would have been spent on favors and donate it to a favorite charity in guests’ honor. One idea here is to let the wedding party choose the beneficiary.
… And the Venue Matters, Too
Incorporating charitable elements into a wedding isn’t the only way to get tax breaks. The venue may offer some benefits, too. If the ceremony is held in a church, the fees could be considered tax deductible. Also consider asking if church members get a discount or waived fee in lieu of an overall donation to the church – a double win, since the charitable donation can be written off on taxes.
If a church isn’t where the couple will tie the knot, other venues like historical sites, museums, libraries, or state or national parks could offer tax benefits if the ceremony fee is tax deductible. It’s worth asking.
Since all these strategies involve charitable giving, and Tax Reform discouraged itemizing for most couples, how can these tax breaks really offer a benefit come tax time? Talk to a CPA about tax planning before both incomes are combined – since the couples’ tax status will change for the entire year, even if the wedding won’t happen until November or December. Bunching charitable deductions the year of the wedding is one way to take advantage of wedding-related tax breaks. That means instead of giving the same amount of money to favorite charities each year, double up on donations the same year as the marriage starts. Read our previous article on year-end charitable donations in the era of the Tax Cuts and Jobs Act for more information on charitable giving tax strategies.
Stay tuned for another post on tax planning strategies for newlyweds. The wedding is just the beginning of a lifetime of smart tax planning. Contact Naden/Lean for questions.