The 5 Life Moments That Change Taxes

Life is full of exciting moments. As you experience a variety of new beginnings and changes, your income taxes will reflect each of those moments a little differently. Keep up to date with how life’s milestones affect the way you file taxes.

Welcoming a Little One to Your Family

Becoming a parent is full of wonderful stages within the first year and beyond for your new family. And whether your newest addition was born on New Year’s Day or Christmas Eve, new parents receive a full year’s exemption—just make sure to have your son or daughter’s Social Security number on hand when filing your taxes.

Starting Your Own Business

As a new business owner, you may consider connecting with a tax professional in order to keep your allowed exemptions in order. For example, if you’ve built a brick and mortar store or invested with startup costs for your business, there may be specific deductions available. Some of the best advice from TurboTax include keeping track of all your expenses (don’t lose those receipts!) and how to make estimated tax payments during the year.

Purchasing a Home

Becoming a homeowner provides many extra write-off opportunities, especially if you’ve only claimed a standard deduction previously. Items such as energy credits, mortgage insurance premiums, and mortgage interest are a few different things to consider when filing taxes. You should receive a Form 1098, commonly known as the “Mortgage Interest Statement”, which will come from your lender.  This will tell you how much in mortgage interest you paid in the previous year. 

Making improvements on your home? Make sure to save all records and receipts of improvements made so you can deduct these expenses if you ever sell your home.

Getting Married

Most people who get married may not be thinking about their tax situation while tying the knot. After you’ve received your official marriage license, it’s important to talk about whether or not you plan on filing your taxes jointly or separately.  Not sure which option fits your new family dynamic? Check out the withholding calculators offered on the IRS website.

Joining the Retirement Force

Retirement may not mean the end of filing taxes, especially if you earn other forms of income that are taxable.  Consider meeting with a financial advisor to discuss your retirement plans.

Looking for the resources for planning for the life events in your future?  Get planning resources and more expert help from the financial planning experts available at Together Credit Union.