Valentine's Day can trigger some important issues involving romance and realty.
DEAR DAVE: My husband and I have always itemized our federal tax return so that we could deduct the roughly $16,000 we pay each year in mortgage interest and property taxes.
Now that the standard deduction for married couples has been raised to $24,000, would it make sense for us to simply claim it and skip the hassle of itemizing?
ANSWER: It would probably make sense to claim the new, higher standard deduction instead of itemizing unless you have lots of other potential tax write-offs.
The Tax Cuts and Jobs Act that President Trump signed into law a bit more than a year ago raised the standard deduction for 2018 federal income-tax returns to $24,000 for married couples, $12,000 for single tax filers and $18,000 for those who are eligible to claim head of household status.
That's up from $9,350, $6,350 and $12,700, respectively, from the standard deduction that applied for 2017 returns.
The Internal Revenue Service believes that those higher limits will allow up to 30 million more taxpayers to simply claim the standard deduction instead of suffering through the time-consuming task of scouring their 2018 spending for possible write-offs.
Still, there's no cut-and-dried answer to your question. For example, even if you choose to take the standard deduction, you might still be able to take special write-offs if you or your spouse contributed to an individual retirement account or similar plan, or if you paid up to $2,500 in student-loan interest for yourselves or a dependent.
Though simply claiming the new, higher standard deduction may be tempting because it would ease your federal tax-filing headaches, you and your husband would be wise to consult an accountant or similar tax professional to assess your situation.
DEAR DAVE: I own my own home, and my girlfriend still lives with her parents. I plan to pop the question to my sweetheart on Valentine's Day. If she accepts, would I need to put her name on the title to my house? Should I ask her to sign a prenuptial agreement?
ANSWER: You aren't legally required to put your fiance's name on the title to your current home. Doing so would automatically give her a half-interest in the property, but no legal responsibility to help make the monthly payments unless her name is also added to the bank's original mortgage contract or if you refinance the loan together.
The two of you probably don't need a full-blown prenuptial agreement - legal jargon for a contract that's signed before the wedding nuptials are done. A "pre-nup" spells out how each of your respective assets would be divided if the marriage ends in divorce.
Most lawyers say that a pre-nup is needed only for those who are marrying someone with far fewer assets or much more debt, or for people who are financially responsible for children from a previous relationship.
Folks who are involved in a family-owned business sometimes sign a prenuptial agreement to reduce the chance of divorce jeopardizing an enterprise that may have been in the bride or groom's family for years.
Discuss real estate and other financial concerns about your upcoming wedding with an attorney, And with your sweetheart.
©2019 Cowles Syndicate Inc.