If you live in a household with two income earners and don’t have any children or dependents, you might be referred to as a DINK (dual income, no kids). This slang term is one that is incredibly common in the accounting world. There is always a time when people are happy living life as a couple without any children. This doesn’t even mean you have to be married. There are many couples that choose to cohabitate and still fit this mold. The tax implications aren’t always the same for all DINKs, but there are some advantages and disadvantages that ring true for most DINKs. Mark Dicus & Company is here to talk about what filing taxes for DINKs looks like.
Advantages of Filing for DINKs
Following are some of the benefits to filing for DINK households. Everyone has different financial circumstances, but here are some credits and deductions that you might be eligible for.
– Unmarried DINKS: If you and your partner have decided that you are going to take a step forward together and live together, the IRS will not allow you to file jointly because you aren’t married. However, there are still many credits that you can take advantage of if you qualify including, higher education expenses, the purchase of a clean vehicle, or even the earned income tax credit.
– Married DINKs: Just like unmarried DINKs, you might be able to take advantage of the tax credit listed above, but a key difference will be the fact that you can file married filing jointly. This can reduce your tax liability depending on your income and any other tax credits or deductions that might qualify for.
Disadvantages of Tax Filing for DINKs
There might be many advantages to being a DINK household including, more income to enjoy between the two partners and a lack of parental responsibilities. However, when it comes to filing your taxes, it can have some real disadvantages. First and foremost, DINKs will have a higher tax liability because they don’t have any dependents to bring that number down. These deductions and credits include the child tax credit and the child and dependent care credit. Also, couples that don’t have children often live in smaller homes. This usually means that they won’t be paying as much interest on a mortgage. Some couples may find that there are some tax benefits that come with filing separately.
Tax Preparation, Filing, Planning & More in Salt Lake City, St. George, West Valley City, Provo, Orem, West Jordan & Greater Cedar City, Utah
If you are getting ready to file your tax return, you can turn to Mark Dicus & Company to make sure that you’re taking advantage of all the deductions and credits that you are eligible for. We work with our clients to make sure that they aren’t leaving any money on the table and are getting all the money that the IRS rightfully owes them. If you have any questions about filing taxes, you can turn to us for answers. Call us today!