Tax Deductions and Credits How Changes in Your Life Can Save You Money Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by TurboTaxLisa Published Jun 13, 2024 3 min read Reviewed by Jotika Teli, CPA Lena Hanna, CPA Whether you got married last year or purchased your first home, major life changes can bring about many questions and uncertainties. Although you may have questions about how life events affect your finances, one thing is certain: life-changing events can save you money on your taxes. Check out just a sample of significant life events that could save you money at tax time. Table of Contents Getting marriedBuying a new homeHaving a baby Getting married Did you get married this year, or are you considering it? We all know that weddings cost a bundle and can really set you back, but one perk of getting married is that you see some bigger tax benefits than when you were single. Now that you’ve tied the knot, you and your loved one can now file your taxes as married filing jointly. This means that you may see lower tax liability than when you were single. This is due to lower federal tax rates for couples who file married filing jointly compared to filing as single. Most married couples will see tax savings. Even if you get married on December 31, you are considered married all year and can reap the rewards of being married. You may also see bigger tax deductions and credits now that you can file as married filing jointly. For example, there’s a bigger standard deduction for tax year 2024. The standard deduction increases to $14,600 if you are filing as single and $29,200 married filing jointly. Also, for 2024, the Earned Income Tax Credit is up to $7,830 with three kids if your filing status is married filing jointly. Buying a new home Homeownership is a big and rewarding life change that is also one of the biggest tax savings people see. Your mortgage and property taxes can really break the bank, but if you purchased a home this year or you are considering it, you can deduct your home mortgage interest and property taxes if you are able to itemize your deductions on Schedule A. Having a baby Did you have a baby last year? If so, congratulations on your new addition to the family! Combined with all the joy and excitement a child brings, you may be trying to figure out how you’re going to pay the costs of supporting your baby. Fortunately, your family is now eligible for new tax deductions and credits as well. Some of the tax benefits you will receive for having a baby are the Child Tax Credit and if you pay for child care, the Child and Dependent Care Credit. For tax year 2024 (the taxes you file in 2025), the provisions are: Child Tax Credit: Up to $2,000 for 2022 – 2025 Each dependent child must be under 17 Refundable up to $1,700 The credit is available if you earn up to $200,000 as a single filer and up to $400,000 if you are married filing jointly. Child and Dependent Care Credit: Up to 35% of $3,000 ($1,050) of child care expenses for a dependent child under 13, an incapacitated spouse or parent, or another dependent so that you can work or look for work. If you have two or more dependents, the credit will be up to 35% of $6,000 in expenses ($2,100). The credit does reduce when your adjusted gross income goes over $15,000, but the lowest percentage would be 20% instead of 35% in this case. You can see why your new baby can be considered your biggest little tax deduction. Life transitions may feel like many things at once: exciting, emotional, confusing, hopeful, and often expensive. On the bright side, these life moments often bring big tax benefits. Don’t worry about knowing these tax rules. No matter what moves you made last year, TurboTax will make them count on your taxes. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed. Get started Previous Post Charitable Giving and Your Taxes Next Post NIL (Name, Image & Likeness) Tax Preparation Checklist: Filing Taxes for… Written by Lisa Greene-Lewis Lisa has over 20 years of experience in tax preparation. Her success is attributed to being able to interpret tax laws and help clients better understand them. She has held positions as a public auditor, controller, and operations manager. Lisa has appeared on the Steve Harvey Show, the Ellen Show, and major news broadcast to break down tax laws and help taxpayers understand what tax laws mean to them. For Lisa, getting timely and accurate information out to taxpayers to help them keep more of their money is paramount. More from Lisa Greene-Lewis Follow Lisa Greene-Lewis on Twitter. 8 responses to “How Changes in Your Life Can Save You Money” My daughter is 18 and attends ccbc college can I claim her as a dependent How would I file married filing jointly if my spouse is not a us citizen yet? My spouse also doesn’t work. 66 yrs old divorced with a 14 yr old making 64,000. Do deaths/ funeral expenses fall under any tax deductions? How can I add an elderly parent who now lives with me. How is deductible a new car? My wife and I married on March of 2017. She is from Africa. I supported her the entire year but had no SSN for her. Obtaining an ITIN was not in the works because the paperwork filed for her Visa also included a SSA application for a SSN. I filed single because I didn’t have her SSN. Now that she is here and has a SSN am I able to file an amendment? My wife is currently self employed and I am retired and we pay estimated taxes each year. However, she is going to retire at the end of December. How do we get Turbo Tax to recognize that change in our taxable income for next year and reduce our estimated taxes. Browse Related Articles TurboTax News Had a Life Change? TurboTax CPAs and EAs Will be by You… Tax Planning TurboTax Life Events Calculator Helps Estimate Tax Savi… Tax News DOMA Struck Down: What Does This Mean for Your Taxes? Tax Deductions and Credits 12 Ways to Save on Taxes Through Life’s Transitions Tax Refunds 6 Reasons it Pays to File Your Taxes Early Tax Deductions and Credits What Does My Relationship Status Mean for My Taxes? Tax News Same-Sex Couples Can File 2012 Tax Returns as Single Be… Tax News Supreme Court Rules Marriage Equality in All States Fur… Life Interest Rates, Inflation, and Your Taxes Tax Reform Life Changing Events Explained (IRS Qualifying Life Eve…
How would I file married filing jointly if my spouse is not a us citizen yet? My spouse also doesn’t work.
My wife and I married on March of 2017. She is from Africa. I supported her the entire year but had no SSN for her. Obtaining an ITIN was not in the works because the paperwork filed for her Visa also included a SSA application for a SSN. I filed single because I didn’t have her SSN. Now that she is here and has a SSN am I able to file an amendment?
My wife is currently self employed and I am retired and we pay estimated taxes each year. However, she is going to retire at the end of December. How do we get Turbo Tax to recognize that change in our taxable income for next year and reduce our estimated taxes.