With each new milestone you reach in life, you must consider the various changes it brings. One thing you can expect to be affected as you go through different life events is the way you prepare your tax returns. This is why it’s important to start thinking well ahead of tax season about what you will need to make sure your tax filing accurately reflects your current situation. Here are several major life experiences that will impact your taxes.

5 Milestones You Can Expect to Affect How You Prepare Your Tax Returns

1. Getting Married 

One of the first things you must decide after getting married is whether to file your tax returns separately or jointly. In either case, your filing status will change, and you’ll be able to claim a new tax exemption. You may also need to adjust your paycheck withholding to account for a higher tax bracket since your income will be combined with your new spouse’s.

2. Having a Baby 

A new baby brings an abundance of joy and great tax breaks you can benefit from. Not only can you claim them as a dependent to reduce your taxable income, but you may also meet the requirements to receive the Child Tax Credit. If you paid out of pocket for any child care expenses, you can claim a credit for that as well. 

3. Buying a Home 

A big perk of becoming a homeowner is all the opportunities for tax deductions it provides. Your interest and property taxes will be deductible, and you may also qualify to deduct points paid on your loan. A tax accountant can help you identify all the deductions you’re eligible for and itemize them properly on your tax returns. 

4. Starting a New Job 

Every time you start a new job, it’s vital to assess your tax withholding and decide if it should be adjusted. If you had any relocation expenses, these may be deductible, and you will need to figure out what to do with the retirement plan you had with your last company. Cashing it in is likely to be taxable. 

5. Death of a Spouse   

Although it’s not a pleasant thought, if your spouse dies, you will need to make sure your tax returns address this. You can still file a joint tax return in the same year they pass away. If you inherited any assets, you will need to determine how this should be included in your filing as well. Tax implications after a death can be quite challenging to figure out and are best left up to a professional. 

If you’ve recently gone through any of these life-changing events, it’s best to start gathering all the information you will need to properly complete next season’s tax returns. This will ensure you have everything on hand and organized to make the process go smoothly. If you need a reliable tax accountant to help make sure your filing is correct, contact Sharrard, McGee & Co., PA. They offer four decades of experience serving the residents of High Point and Greensboro, NC, and have earned a solid reputation for providing high-quality accounting and financial services. Call (336) 884-0410 to schedule an appointment or visit them online for more information on how they can guide you through the tax preparation process.