Dual Income, No Kids: Tax Considerations for DINKs

“Dual income, no kids” (DINK) is a slang phrase/acronym that describes a household with two income earners and no children or dependents. Living a child-free lifestyle may seem appealing to those who wish to focus on themselves and their careers rather than starting a family right after getting married.  

Contrary to popular belief, DINKs aren’t always married couples – they can be unmarried couples or just two people living in the same household. All DINKs have different tax implications depending on their individual circumstances. Keep reading to learn about the tax obligations and certain tax breaks you may qualify for as one-half of the DINK equation. 

Tax advantages for DINK households 

Everyone’s finances call for different tax credits and deductions. If you live in a dual-income household, the types of credits and deductions you claim depend on your individual filing status and income unless you choose to file with the status of married filing jointly. Check out a few examples of deductions and credits you may be eligible to claim based on the type of DINK you are. 

Unmarried DINKS 

You and your partner have decided to take the next step in your relationship and move in together. Since you’re living together, you may figure combining your income would make more sense for your financial goals. Unfortunately, the IRS doesn’t allow you to file jointly because you are not a married couple.  

But all hope is not lost – you may be eligible for certain tax breaks depending on your individual incomes and expenses for the year. For example, deductions and credits are available for higher education expenses, purchases of clean vehicles, and the popular Earned Income Tax Credit. 

DINKS who cohabitate 

Say you and your best friend decide to buy a house and equally contribute toward related costs. While you might combine portions of your income for household purposes, the IRS does not take this factor into consideration for tax purposes. Because of this, your filing status won’t change (assuming you typically file as Single), but you may be eligible for a few tax breaks designed with new homeowners in mind. 

For example, the mortgage interest deduction allows homeowners to deduct interest on up to $750,000 worth of home loans if their filing status is single or married filing jointly. Taxpayers who choose the married filing separately status can deduct interest on $375,000 worth of qualifying debt. 

Married DINKS 

If you are a married couple with no dependents, you have access to the same credits and deductions mentioned above. But since you’re now a partnership in the eyes of the IRS, you can decide to file separately or jointly. Filing jointly may reduce your tax liability depending on your individual incomes as more credits and deductions may be available to you.  

Read Married Filing Separately vs. Married Filing Jointly for more information.  

Tax downsides for DINK households 

Many people focus on the perks that being a DINK household brings you, but there are a few downsides. It goes without saying, but DINKS typically have a higher tax liability because they cannot claim certain dependent-related tax credits like the Child Tax Credit and the Child and Dependent Care Credit. Also, people without children tend to live in smaller houses, so you may have less mortgage interest to deduct on your tax return. 

Speaking of mortgage interest deductions, if you two equally contribute to all household expenses, including mortgage payments, both taxpayers must have their name on the deed to deduct the mortgage interest for the year. There are some scenarios when only one resident’s name appears on the deed (For example, moving in with your partner who was already a homeowner before your relationship started.); this may present conflict.  

Additionally, you may be subject to the marriage penalty if you combine your income for tax purposes. This penalty is not as dramatic as it sounds – simply put, this occurs when a household’s overall tax bill increases when people with similar incomes get married and file jointly. Because of this, you may choose to file separately.  

Dual Income, No Kids FAQs 

Being one-half of a dual-income household can sometimes present unique challenges come tax time. Below, we’ve answered some common questions about dual-income households and taxes. 

What does DINK stand for? 

DINK stands for dual income, no kids. The phrase describes households where two people earn a living without kids or dependents. 

What are the tax benefits for DINK households? 

There are tons of financial benefits for DINK households, but each person’s tax advantages are linked to their individual incomes. One way to determine this is to note the types of tax-deductible purchases you’ve made throughout the year. 

What tax credits or deductions are not available for DINKs to claim? 

Since DINKs do not have children or dependents, they are not eligible to claim tax credits directly related to these groups.  

Are you unsure of which credits and deductions you qualify for? TaxSlayer can help – our software will guide you through each step of the filing process and find all the tax breaks you deserve. Get started today! 

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