While tax code overhauls are bound to change your tax bill, an event in your own life is a much more common reason why you’d need a tax tune-up. Here are a few examples of life events that may alter your tax bill and may require a review:
- A raise or promotion: It probably feels pretty good to know that your hard work pays off. But consider that you may pay a higher tax bill because you may be nudged into a new income tax bracket.
- A relationship change: A marriage or divorce will change your filing status. Remember that a filing status change in December will still apply to the whole year.
- A home sale: Buying and owning a home opens up new doors to deductions and credits, including mortgage interest, home equity loan interest and energy efficiency. It also brings in the often-used capital gain tax exclusion.
- A birth: New life, new tax breaks. Having a baby means you may be able to take advantage of credits, like the Child Tax Credit, Family Credit or Earned Income Tax Credit.
- A death: While inheritance is often tax-free, there are exceptions. They include IRAs (distributions of which may be taxed), as well as understanding the tax impact of inherited property.
If you’d like more information about how a big life event could change your tax obligations, please call us at (888) 388-1040.
