Marriage & Tax

[peanutpakkie]

Hi everyone,

I am just looking into something out of interest sake.

My wife resigned her current job and will only be looking for a different job in about a year or so. She is pregnant and will be taking care of our child. Since my wife have been working for half of the year, all taxes that she already paid can be claimed back by SARS next year.

However, my salary falls in the 35% bracket. Is there any way that I can reduce the amount of tax that I pay (and thus that we pay)? We are married "Out of community of property with the accrual system". I assume we can't file taxes jointly when married out of community of property? If we could file taxes jointly, this would decrease our liable tax by about R30-40k. Is it possible to switch to "in community of property" to allow taxes to be filed jointly? Is this legal?

Basically, what can we do to reduce our taxes when one spouse isn't working? Anything?

Is it normal that one couple with two smaller salaries (10k 10k) can pay less tax than an other couple with salaries (20k 0k). It just seems like filing tax jointly should always be allowed? I'm not sure.

Any advice is appreciated.

Thanks everyone.

 

[Sinbad]

No you cannot reduce your tax burden this way, more's the pity. Even cop you are taxed separately.

 

[ebendl]

Technically you can change your marriage type, but that's quite a legal process.

And yes, only when you're married inside community of property then you can "share" taxes (and it comes with all the other sucky things like both of you have to sign etc.)

I must say, we're quite backward in this regard - I know in the US you can def. share income tax. My wife and I are looking at doing the same thing (i.e. she'll quit and take care of the kids) and I would love to pay less tax... :/

 

[TJ99]

So you don't even save on tax and people STILL get married?

 

[Sinbad]

Technically you can change your marriage type, but that's quite a legal process.

And yes, only when you're married inside community of property then you can "share" taxes (and it comes with all the other sucky things like both of you have to sign etc.)

I must say, we're quite backward in this regard - I know in the US you can def. share income tax. My wife and I are looking at doing the same thing (i.e. she'll quit and take care of the kids) and I would love to pay less tax... :/

All marriages and civil unions in South Africa are regarded as being "in community of property" unless the couple enters into an ante-nuptial contract excluding such community of property. In simple terms, a marriage where community of property is excluded is one where the parties maintain completely separate estates, whereas a couple married in community of property have a single, joint estate.

If you are married in community of property, your investment income (whether from interest, rental, or capital gains) is pooled with that of your spouse, and then split down the middle for tax purposes. This means that each spouse is taxed on 50% of their joint investment income. Both spouses would enjoy the benefit of the basic interest exemption.

This pooling of income does not however apply to other income, such as that from salary. In this case, both spouses are regarded as separate taxpayers, and each is taxed on such income in their own right.


http://www.moneywebtax.co.za/moneywebtax/view/moneywebtax/en/page259?oid=60737&sn=Detail

 

[Cyberdude]

Got to your boss, ask him to cut your salary in half and put your wife on their payroll for the other half!

 

[Celine]

And yes, only when you're married inside community of property then you can "share" taxes (and it comes with all the other sucky things like both of you have to sign etc.)

:wtf:

 

[Bona Botse]

Got to your boss, ask him to cut your salary in half and put your wife on their payroll for the other half!

Sneaky. I like it.