Investment strategy - tax burden

USA Discussion in 'Individuals' started by micromoore, Jun 13, 2018.

  1. micromoore

    micromoore

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    Hi. I am opening an Investment account and have 2 tax strategies. Either open it in my wife's name only or open it jointly. Here's the specifics:
    1. We are not technically married. We live in Texas and can be common law if we choose.
    2. I make 100K/year and she has no income. Currently, I file as Single and she doesn't file.
    3. There would be no other income besides my salary and the Investment income.
    Which strategy is better for keeping the tax burden at its lowest. Thank you!
     
    micromoore, Jun 13, 2018
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  2. micromoore

    kirby VIP Member

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    If it is in your wife's name, then income for fed tax is hers if she files separately from you and so is taxed at lower rates than if that income got added to yours, which has a higher tax rate.
     
    kirby, Jun 18, 2018
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  3. micromoore

    bocacpa

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    to go along with what kirby said - if it is in your wife's name, that would be her only income. Depending on the amount earned, it could be below the threshhold and she still wouldn't have to file. Even if she does, with all the exemptions, she probably still would have very little to have to pay tax on.
     
    bocacpa, Jun 25, 2018
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  4. micromoore

    bklynboy VIP Member

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    Be weary that if you open in her name the account is hers and she can take the money out anytime she wants. Everyone believes that this wont happen without their consent but it happens more than you think especially when you hit a rough patch. May not be worth the tax save to give up ownership over the account. Unless you expect a sizeable amount of NII (around 50K annually) I would not recommend it.
     
    bklynboy, Jun 26, 2018
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  5. micromoore

    BrisbaneInvestmentGuy

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    I think it would be too confusing to keep it as a joint and i don't think i would recommend it at all. Personal opinion I guess.
     
    BrisbaneInvestmentGuy, Jul 18, 2018
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