Every day, someone is celebrating a milestone. In the US alone, there are over 6,000 weddings, over 10,000 babies born, and thousands of homes bought—all of which can have a significant affect a person’s life. One element that is, perhaps, not immediately thought about is the impact on someone’s taxes, which is explored in the guide below.
What Occasions Can Change How You File?
1. Becoming a Homeowner
There are a host of money-saving deductions available to those who buy a house—including receiving credit for the interest associated with your mortgage or home equity loan. Additionally, you can also take deductions against your property taxes, whereas before, you were reliant on income tax deductions.
2. Getting Married
After tying the knot, you’ll need to update your filing status on your income tax return. You can select married filing jointly or married filing separately. Each status comes with its own benefits and drawbacks, so talk to an accountant about what is best for your family. You also will need to complete an updated W-4 with your employer. Newly-married spouses should calculate new withholding allowances so the right amount is taken out of their respective paychecks.
3. Having a Child
Parents are eligible for tax credits worth $2,000 on each dependent child until they turn 17. Depending on your situation, claiming children on your return can also potentially reduce taxable income by a significant amount.
4. A Spouse’s Death
Married couples who experience the death of a spouse are still required to file a final return in both their names. Estate taxes may also be figured in. These can be complex and often require the expertise of an accountant who specializes in these matters.
The accounting office of Donna Sellers, CPA in Brownfield, TX, has helped individuals and business owners by providing professional tax preparation services. For more than 20 years, clients continue to return because the firm has a proven track record of impeccable tax knowledge and personalized attention. If you’ve experienced a major life event or are planning one in the near future, call the office at (806) 637-8556 for customized guidance. You can also go online for details on other services, such as bookkeeping.