Has your life situation changed, and you’re unsure whether to adjust your tax withholdings? This is a common question that often goes unanswered, causing people to miss out on hundreds or thousands of dollars in potential income each year. Affordable Tax Service has been serving the Kittanning, Pennsylvania, area with affordable tax preparation services for over 10 years, and their experts want to help you maximize your earnings. Below, they answer three frequently asked questions regarding tax withholding.
3 Tax Withholding FAQs
How Does Purchasing a New Home Affect My Withholdings?
Purchasing a new home is an exciting event, and even better, there are certain tax exemptions you can take into account. Most first-time homeowners are shocked to discover their tax savings after they purchase a new home. Keep records of your paperwork, as you will have the benefit of deducting your property taxes, mortgage insurance, points paid, mortgage insurance payments, home improvements, or energy credits. Also, if you had to tap into your IRA account for a down payment on your first home, the IRS gives you a penalty break up to $10,000 if you utilize retirement funds.
Do Life Events Affect My Tax Withholding?
Major life events bring a lot of joy into your life, including some tax benefits. Married persons are allowed to file jointly, which qualifies them for a reduced tax rate, as well as other deductions. Additionally, children will qualify your family for allowances, which reduces your monthly taxes. However, work with a specialist to ensure you have a balanced amount of allowances which provides for a buffer at the end of the year. No one wants a hefty tax bill when they have a family to support.
What Should I Do If My Job Status Changes?
Any income change is an indication that your tax withholding may change. If income increases, your family could be placed in a larger income bracket. If income is less, check with your accountant to see if you fall into a lower tax bracket. If one or both spouses lose employment for part of the year, or gain it back later, it’s best to consult with your tax professional about your withholding amounts.
Do you have questions regarding your tax withholdings? If so, contact the professionals at Affordable Tax Service. They are the area’s leading tax experts, and they always guarantee every return. Call them today at (724) 548-1350, or visit their website for more information.