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All the Single (and Married!) Ladies

All the Single (and Married!) Ladies

February 08, 2024

Dear All The Single (and Married) Ladies and Dads of Daughters, 

 

Some of us like to spend money. I don’t judge you. In fact, depending on the item, I like to spend money too (Hello, new kitchen knife set and 4 paddle boards!). However, there is one place I watch my pennies like a hawk…my federal income taxes.   

Single people pay more in federal income taxes than our married friends (assuming our income is the same and we are in the top 2 tax brackets), and we also pay more in capital gains taxes when we sell our homes (assuming our gain is more than $250,000). A married person selling a home has up to $500,000 in capital gains that are free!  

Is there a solution to paying all this extra tax if you’re a single woman? Yes. Get married! Is it a perfect solution?  

 

No. Because a man is not a plan.  

 

Don’t get me wrong, I’m pro-men. When I think about the most influential men in my life – my dad and my 2 grandfathers - I have been beyond blessed. And, if you are still reading this and you are married, remember, A MAN IS NOT A PLAN.  

 You need your own plan, married or single.  

 If I had a dime for all the hardworking moms and brilliant businesswomen who tell me they were too distracted or too busy or thought everything was taken care of, I would be paying millions in single person taxes right now! Your active and proactive involvement in your financial life is an investment you can’t afford to overlook.  

 We all have an inevitable season of job loss, death, divorce, illness, taking care of our parents and so much more. Through all the ups and downs, you must actively involve yourself in your family’s finances. If you do, you will protect and maintain the course of your life and those of your family.  

 If you are currently married, the odds say you will outlive your spouse and therefore eventually be forced to make financial decisions on your own. Prepare now for your future financial life by getting to know every single thing about it. Put YOURSELF in the driver's seat on the road to financial well-being.  

 I don't intend to solve my tax problem by getting married (any time soon anyway!). For now, I’m going to work on minimizing all my single lady taxes to the best of my ability with my team at Well Lived Wealth. We’re always working tirelessly to make life easier and secure. Below are a few of our latest ideas that I’m going to apply to my financial life and that might be appropriate for some of you. 

 

  •        Employ an investment strategy that helps offset capital gains taxes. It’s simple, automatic, and it builds a war chest to combat these types of taxes over a lifetime. When it’s time to sell the house, this is where one could draw upon to offset the gain of the house.

 

  •        Be relentless with the dollars that may be stashed in my after-tax portion of a 401k, that is then in turn, converted to Roth dollars (a.k.a. Mega Backdoor Roth). I’m not only thinking taxes now, but this helps me when I’m an old single lady (with cats). 

 

  •        I Make the most of my variable life insurance policy. This helps me invest in a way that doesn’t generate a big tax bill (if I structure correctly). 

 

  •        Donate stock that has a gain directly to charity. This could be more powerful than a cash donation. 

 

These ideas are right for this single lady, but they may not be right for you. Make sure you work with your CPA and financial planner to maximize your single person tax strategies.  

 

Happy Valentine’s Day, 

 

Molly Ward  

 

Equitable Advisors now Well Lived Wealth and its associates do not provide tax or legal advice and the information provided is general in nature and should not be considered legal or tax advice. Please consult with an attorney, tax professional, or other advisor regarding your specific legal or tax situation. PPG-6327692.1(2/24)(Exp.2/26)