This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). Don’t let the tax-side of weddings ruin your big day, just be wary of it in the planning stages.Īdvertiser Disclosure: The offers that appear on this site are from companies from which MoneyUnder30 receives compensation. When you’re planning for your wedding, it’s important to be conscientious of how taxes might impact your decisions. So depending on the kind of wedding you’re having and how much help you’re getting, your gifters may or may not have to pay taxes. If they’re fully covering the wedding and your celebration ends up costing more than this, they’ll only pay taxes on the amount that exceeds the exclusion limit. This means that if you’re getting help from two parents - or grandparents, or relatives, or just really good friends - they could split the costs between them and exclude up to $34,000 in costs. In 2023, the annual exclusion per taxpayer for gifts is $17,000 (up from $16,000 in 2022). Since they can split the gift between themselves as givers as well as split the gift between you and your future spouse as receivers, they can give a pretty significant amount before they’ll be hit with the gift tax. Luckily, the thresholds for gift taxes are fairly high, so depending on how much they contribute, they might be able to get away without paying taxes. If your parents write a check to you for a lump sum to pay for the wedding, this is most definitely a gift and will be subject to gift tax.If you parents pay for the wedding right out of their pockets, this may not be considered a gift because it could be argued that they are not giving you the money directly.It really depends on whether they give you the money straight-up to pay for the wedding or if they pay for the wedding out of their own pockets. So, will your generous parents be taxed on their gift? Is the money even considered a gift? In this day and age, these traditions might not have a place in your wedding events, but many parents still fork over quite a bit of money to help pay for some of the wedding, if not all of it. Will Mom and Dad Be Taxed?Īge-old tradition says that the bride’s parents pay for the wedding and reception and the groom’s parents pay for the rehearsal dinner. Likewise, if your church needs to purchase additional equipment (tables, chairs, etc.) to host your event, consider purchasing the equipment for them as a donation and using the expense as a tax write-off. If you just have to increase your donations by a couple hundred dollars in order to avoid the ceremony fee, it might be worth it considering you’ll be able to use your contributions as a tax write-off and give to a good cause all in one fell swoop.Īre you using the hall or banquet room at your church for your reception? The rental fee could be a write-off. If you’re having your ceremony at a religious site, it might be worth investigating whether your ceremony fees could qualify for charitable contributions.Īlternatively, if you are a member of the church where you will get married, talk with the church administrator to see if there is a donation minimum for members so that you won’t have to pay a ceremony fee. Taxes can end up being a significant amount, so don’t forget to include them in your wedding budget. If you start spreading a sales tax percentage across your entire wedding budget, your total tax bill could reach a couple of thousand dollars or more. Sales tax on a $6,000 caterer bill could easily reach or exceed $500. Guess what? Most of the items in your wedding budget are subject to sales tax (with some exceptions such as services or building rentals). When you’re making the first draft of your wedding budget, it’ll probably include all the must-have items like a cake, attire, reception hall rental fees, disc jockey fees, catering costs, costs of the bar, and flowers. Taxes on a $100,000 prize could be more than you planned to spend on a wedding in the first place! So there really is no such thing as free. However, those with prizes worth $10,000, $50,000, or even $100,000 may need to re-consider the amount of taxes they’ll have to pay on the said prize before claiming their winnings. Winners won’t have to worry much if their prizes are small. The IRS considers any prize to be “other income” for you and requires that you report it on your tax return (you’ll likely receive a 1099 form for large prizes). Not if Uncle Sam has anything to say about it: Any time you win a prize, you have to pay taxes on that prize. With prizes ranging from a free tuxedo rental, to free photographer services, to even an entirely free wedding, brides near and far know that wedding giveaways are abundant and will do just about anything to get something free or discounted for their expensive day. The Bottom Line: Don’t Forget Uncle Sam.
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