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“Two is better than one” is an old adage that translates to finances, too. Two incomes can go much further than one, especially between married couples.

People who say “I do” also have access to various tax breaks that can give them a financial edge when it comes to building wealth. For instance, married couples filing their taxes jointly get a standard deduction of $27,700 in 2023, while single filers get a $13,850 deduction.

How can married couples act on the many tax breaks they have access to and use them to build wealth? Two certified public accountants share a few strategies for couples to consider.

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Strategy 1: Investing

When married couples get a tax deduction or tax credit, there’s an opportunity to invest that extra money. There are a string of ways to invest the money, but couples could benefit from investing in themselves, says Sheneya Wilson, a CPA and founder of Fola Financial in the Bronx in New York City. Couples may choose to use their tax savings to invest in courses that improve their skills, market value and salaries, she says.

Retirement accounts like 401(k)s, IRAs or regular brokerage accounts are also an option for couples. Investing those extra dollars from tax breaks means couples have more money that can potentially grow and enjoy the benefits of compound interest.

Wilson adds that married folks can also consider alternative investments, such as commodities, gold, silver, royalties or music catalogs.

Ultimately, couples can choose investments that align with their goals and legacy.

“The best investments are going to be in line with how that person wants to leave an influence on the world,” Wilson says.

Strategy 2: Real estate

Married couples who own a property may be able to sell it and exclude some of the real estate capital gains tax from their income. For married couples filing jointly, that means they can keep up to $500,000 of the profit tax-free. Single filers, on the other hand, are capped at $250,000.

“Now think about what you can do with around $500,000 of tax-free income,” says Williams. That extra money could go toward investing in another property, she adds.

Note that couples have to own the house, use it as their main home, live there for at least two of the five years before selling and meet other rules in order to qualify for the exclusion.

Strategy 3: 529 plans

529 plans — investing plans for education that allow tax-free growth and withdrawals — are another way couples can use tax breaks to build wealth, says Jasmine Young, a CPA and founder of Southern Heritage Financial Group in Atlanta.

“It could be your niece, your nephew, your cousin, it could be you, whoever’s gonna use the money for educational expenses,” Young says. ”That’s one way for you to reduce your tax liability and put the money somewhere that’s going to give you a resource to build generational wealth.”

Some states offer deductions or credits for 529 plan contributions. A perk for married couples is that in many states, joint filers can deduct double the amount than single filers, lowering their taxable income. The amount joint filers can deduct varies from state to state.

Another way married people can benefit from 529 plan tax benefits is with the federal gift tax exclusion. While 529 plans don’t have an annual contribution limit, contributions are considered “gifts” by the IRS, which means gifting over a certain amount could lead to extra paperwork at tax time. In 2023, those married filing jointly could gift $34,000 without needing to file a gift tax return versus $17,000 for single people.

Married couples who take advantage of this larger limit can save more annually for their kids or loved one’s kids and potentially help them grow wealth faster.

Another wealth-building strategy couples can potentially use beginning in 2024 is rolling unused funds in a 529 account into a Roth IRA account for the beneficiary. By rolling unused funds into a Roth IRA, the beneficiary — be it a child or family member — can get a head start on saving for retirement. There are several conditions account owners must meet to do this, so consult a financial advisor beforehand.

Strategy 4: Entrepreneurship

If one spouse is an entrepreneur, or a couple runs a joint venture, there’s an opportunity to write off business losses during tax season, Wilson says.

“If you are married, filing jointly and your spouse is investing in starting a business, there may be a net loss from that business venture on the joint tax return because that spouse was investing in maybe educational courses (to) start their business,” she says.

In 2023, married couples with their own business can take a loss of up to $524,000, compared with $262,000 for single filers. The dollars that may have gone to paying taxes can be funneled into growing an existing business, starting a new one, or paying down debt.

Couples curious about exploring more strategies they can implement may want to speak with a finance professional like a tax advisor or financial planner.

Whether you’re planning for your retirement or your family’s future, Byline Bank’s Wealth Management team is ready to provide customized solutions for your financial needs. Get in touch.

This article was written by Elizabeth Ayoola of NerdWallet from The Associated Press and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to [email protected].