Many important events in your life that happen throughout the year may have a significant impact on your tax return. Buying a home, having a baby, switching jobs, getting divorced, retiring and other lifestyle changes can change how you pay taxes.
Having a child
Your filing status might also change. If you are a single parent, see if you qualify to file as Head of Household. It could mean more tax benefits than if you are filing as single.
If you adopted a child, you may also qualify for the Adoption Tax Credit.
Tying the knot
Congrats! If you recently got married, it is an exciting time in your life. However, it can affect your taxes in some significant ways. For example, you must choose to file either Married Filing Jointly or Married Filing Separately.
If you recently changed your name due to marriage, you must change your name on all legal documentation starting with your Social Security card. Don’t forget to update your name with your bank, job, insurance, and Driver’s License. This can affect your taxes, so make sure you update your name prior to filing. It can be a lengthy process, so get started ASAP.
Read 5 Tax To-Do’s for Newlyweds to help you prepare to file for the first time together.
Divorcing or separating
A lot of things change as a result of divorce, including your tax situation. You might have a change of address, change of name or change of withholding. Additionally, you’ll need to know how to treat alimony, child support, property settlements and more on your tax return.
Getting a new job
When you start a new job, you must fill out Form W-4. Check your withholdings to make sure your new company is withholding the correct amount from your paycheck for taxes. You should check your withholdings whenever a new life event occurs, and when the tax laws change – not just when you get a new job.
Losing your job
If you recently lost your job, you will probably qualify for unemployment benefits. You still have to file taxes when you are unemployed if you earn over $12,000 if you are single or $24,000 if you are married. If you received unemployment compensation, you should receive Form 1099-G and report the amount you received as income.
For more information on unemployment benefits and your taxes, read Filing Taxes When You Are Unemployed.
There is a lot to know about Social Security, IRAs, and other retirement plans. You may be eligible for a credit for making contributions to your retirement savings.
If you need to make an early withdrawal from your retirement account, you might owe a tax penalty. See if you qualify for an exception to the penalty here.
If you are still working towards retiring, TaxSlayer has lots of tips to help you meet your goal.
Buying a new home
Buying a new home is a big financial step. If this is your first home, there are several tax breaks just for homeowners that you’ll want to claim on your next return. Know what you can and cannot deduct on your return for your home as well as how you treat items such as closing costs, real estate taxes, home mortgage interest and more.