Tax preparation happens yearly, and after filing a few times, most people learn what to expect. However, even if you have experience, it’s worth consulting an expert since a major life event can change the process entirely. Here's a closer look at some common life events that can change how you file your taxes.

A Guide to How Life Events Can Impact Your Taxes

1. Going Back to School

Furthering your education offers many life and professional benefits. In addition to those, you can get a variety of education credits. The American Opportunity Tax Credit provides $2,500 for the first four years of college, while the Lifetime Learning Credit provides up to $2,000 during any point in your higher education. However, you're only allowed one credit a year, and married couples must file jointly to qualify. If you're not currently a student but attended in the past, you can deduct up to $2,500 in student loan interest if you meet the income requirements.

2. Getting Married

Getting married typically results in lower income tax rates. Most married couples qualify for higher deductions than their single counterparts. Yet, marriage’s tax perks don’t always apply in every case, so check with your accountant before choosing to file jointly.

3. Having a Child

While welcoming a child into the world is a joyous event, raising them can be expensive. The government helps to reduce the costs of having dependents by offering tax breaks to parents. Children up to the age of 17 qualify you for the Child Tax Credit, which was increased to $2,000 in 2018. You can also get a credit of up to $1,050 for child care.

4. Opening a Retirement Account

Whether it's your first time contributing to a 401k plan or you've decided to supplement one with a Roth IRA, adding to a retirement fund comes with a variety of tax perks. The IRS allows partial to full deductions on most traditional retirement contributions made during the tax year. However, if you borrow from the account or cash it out, you’ll have to pay taxes on the money you withdraw.

Tax preparation is complicated, so skip the hassle and stress by leaving it to the professionals at ZP Tax in Montgomery County, MD. From taxes to bookkeeping, this firm is committed to offering honest, affordable, and accurate work to businesses and residents across the Capital Beltway. Visit their website to learn more about their tax preparation services, or request tax help today by calling (301) 587-4829.