Marital Deduction

AAA

DEFINITION of 'Marital Deduction'

A tax deduction that allows an individual to transfer some assets to his or her spouse tax free, creating a reduction in taxable income. A marital deduction is mainly used for the purposes of estates and gifts.

INVESTOPEDIA EXPLAINS 'Marital Deduction'

The Internal Revenue Service has strict guidelines for allowable deductions, so it is important to make sure that you or your accountant adheres to them when making deductions.

RELATED TERMS
  1. Unlimited Marital Deduction

    A provision in United States Federal Estate and Gift Tax Law ...
  2. Marital Trust

    A fiduciary relationship between a trustor and trustee for the ...
  3. Unified Tax Credit

    A tax credit that is afforded to every man, woman and child in ...
  4. Kiddie Tax

    A special tax law created in 1986 imposed on individuals under ...
  5. Adoption Credit

    A federal tax credit that may be claimed by federal taxpayers ...
  6. Marital Property

    A U.S. state-level legal distinction of a married individual's ...
RELATED FAQS
  1. What is an IRS letter audit / audit by correspondence?

    Every year, the Internal Revenue Service (IRS) sends numerous notices to taxpayers. Letter audit, or audit by correspondence, ... Read Full Answer >>
  2. When might an abatement be granted by the IRS?

    The Internal Revenue Service (IRS) frequently imposes interest and penalties due to the late filing of a tax return, underpayment ... Read Full Answer >>
  3. How can I lower my effective tax rate without lowering my income?

    There are lots of ways to lower your effective tax rate, although your individual circumstances determine whether you can ... Read Full Answer >>
  4. Do I need to file an income tax return every year?

    Contrary to popular belief, there are indeed situations where a person does not need to file a tax return every year. For ... Read Full Answer >>
  5. How can I find out which income tax bracket I am in?

    U.S. federal tax brackets are based on filing status (single, married filing jointly, married filing separately or head of ... Read Full Answer >>
  6. What is the difference between income tax and capital gains tax?

    The conceptual difference between income tax and capital gains tax is that income tax is the tax paid on income earned from ... Read Full Answer >>
Related Articles
  1. Options & Futures

    Getting Started On Your Estate Plan

    With some preparation, you can save your heirs from paying a hefty estate tax. Here are some tips.
  2. Retirement

    Refusing An Inheritance

    Contrary to popular belief, inheriting assets isn't always a good thing. Find out what to do if you want to disclaim them.
  3. Taxes

    IRS Refund Lost? Here's What to Do

    Don't panic. There are a number of reasons your refund might be delayed – and solutions for each.
  4. Investing

    $3M Question: Dream Wedding Or Dream Retirement?

    Wedding season is in full swing, though millennials may be putting off marriage more than previous generations, wedding budgets continue to rise.
  5. Economics

    What's a Deductible?

    With insurance, a deductible is the amount of money the insured pays out-of-pocket before the insurance company pays for the loss.
  6. Taxes

    Explaining Taxable Income

    Taxable income is the net of gross income and allowable deductions.
  7. Taxes

    Why People Renounce Their U.S Citizenship

    It's an irrevocable act but, surprisingly, a growing number of Americans are giving up their citizenship, largely for tax reasons.
  8. Taxes

    OK, So I'll Be Smarter Next Tax Time

    5 tax resolutions to start on right now for a smoother tax return next April 15.
  9. Taxes

    What To Do If You Lost Your W-2

    There's no need to panic if you don't have your Form W-2 to file taxes, there are easy ways to gain access to the missing form or file without it.
  10. Taxes

    Will Itemized Deductions Get You A Bigger Refund?

    April and taxes are due soon. If you need to file your return, you might have to decide if itemizing your deductions this year will net you a better deal.

You May Also Like

Hot Definitions
  1. Social Security

    A United States federal program of social insurance and benefits developed in 1935. The Social Security program's benefits ...
  2. American Dream

    The belief that anyone, regardless of where they were born or what class they were born into, can attain their own version ...
  3. Multicurrency Note Facility

    A credit facility that finances short- to medium-term Euro notes. Multicurrency note facilities are denominated in many currencies. ...
  4. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  5. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  6. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!