Why you should plan your wedding as soon as possible in 2024
A wedding is not only a romantic connection, but also a legal and financial decision. Especially for couples where one partner earns significantly more than the other, tax brackets 3 and 5 can offer significant financial advantages. However, amid the changes of 2024, such as the abolition of tax brackets 3-5 being discussed as part of the marriage splitting, there is talk of abolishing these two brackets. To mark the occasion, we would like to highlight in this blog why a wedding is particularly advantageous for couples with a large income difference and why it might be advisable to consider marriage as soon as possible.
Tax classes 3 and 5 – Optimized taxation for different incomes
Tax classes 3 and 5 allow couples who earn different financial income to optimize their tax burden. The partner with the higher income (tax class 3) benefits from a lower tax rate, while the partner with the lower income (tax class 5) has a lower tax burden due to higher deductions. This leads to an overall lower tax burden for the married couple compared to other tax class combinations.
Possible abolition of tax brackets – Potential financial implications
In the course of a tax reform or adjustment, there is the possibility that tax classes 3 and 5 could be abolished. Instead, married couples would only be able to fall back on the still existing tax brackets, in which both partners pay the same tax rates. This could lead to a higher tax burden for couples with a large income difference. Without the possibility of tax optimization, the financial situation for these couples could be worse than before. Since this would only apply to couples that would apply after the introduction of the new tax reform, it makes sense to consider getting married in 2024 in order to still be able to benefit from the current tax advantages.
Planning security and financial stability
A timely wedding can also offer the partners planning security and financial stability, as the current tax advantages remain in place for the time being. The clear regulation of financial responsibilities within a marriage can protect the partners from unexpected financial difficulties and allows for long-term planning for common goals, such as buying a house or investing.
Legal and social protection
A wedding offers not only tax advantages, but also legal and social security for both partners. This includes inheritance law, the right to a widow’s/widower’s pension, the right to statutory health insurance as a family member and other social benefits. For the partner with the lower income, this can mean a significant difference in financial security.
The importance of the individual situation
Despite the possible abolition of tax brackets 3 and 5, it should be emphasized that the decision to marry is a personal one. The financial implications of a wedding vary depending on individual income, life plans, and tax laws. Therefore, it is advisable to consider a wedding not only for tax reasons, but also taking into account your personal life situation.
Result
For couples where one partner earns significantly more than the other, tax brackets 3 and 5 can offer significant financial benefits. In view of the possible abolition of these tax brackets in 2024, it is advisable to consider getting married early in order to be able to benefit from the current tax advantages and spousal splitting. However, financial aspects should not be the sole reason for a wedding. Every couple should make their decision based on love, respect, and shared life goals, while the financial benefits can be an added incentive.
