Is Your Engagement Ring Purchase Tax Deductible?
Valentine’s Day is one of the most common days in which couples get engaged. With the big day approaching, you may have just made a significant purchase of an engagement ring. I’m sure you have often heard people praise the great tax benefits of getting married and may have wondered if a benefit included an engagement ring tax deduction.
Unfortunately, we have some bad news. The cost of your engagement ring can’t be deducted as a write-off on your personal income taxes.
When you purchase an engagement ring, it is not only a very personal choice, but it is also a personal expense. While that personal expense may be expensive, it is not deductible on your tax return. Your personal expenses are those you incur on a day-to-day basis – unrelated to a business or piece of property you own.
While it may be much more expensive, in the eyes of the IRS an engagement ring is no different from a weekly trip to the grocery store or your morning Starbucks run. These are discretionary expenses you make every day, for which you can’t claim a deduction on your tax return.
But please don’t let this deter you from getting that ring. The marriage that will follow can greatly reduce your tax exposure. Of course, there are other many other emotional benefits, but we here at H&R Block can only advise you on matters of the IRS, not matters of the heart.
Married couples reap many tax benefits. These benefits include a change in tax bracket if you and your spouse have varying incomes, increased exemptions and standard deductions, higher exclusions from the sale of a home, and the ability to benefit shop if both you and your spouse have insurance provided by your employers.
While you may incur a large expense to purchase that beautiful engagement ring this Valentine’s Day, and the ring itself will not provide any tax benefit, your marriage likely will. Again, while your engagement ring cost can’t be a tax deduction, think about the implications of life changes on your taxes.
If you need assistance in completing a more complex tax return, make an appointment today at your local H&R Block Office.