How Life Events Can Impact Your Taxes

Getting married. Having a baby. Buying a home. These exciting (and sometimes overwhelming) moments can shape your future in big ways. What you might not know is that they can also lead to major tax savings.  

If you’ve recently experienced a significant life event, you might qualify for certain tax deductions or credits that lower your tax bill. Not sure how to claim them? Don’t worry. TurboTax can help. 

Our Life Events Calculator makes it easy. Just answer a few questions and get a personalized estimate of your tax savings based on the recent changes in your life. 

*Note: Our Life Events Interactive Calculator is for estimation purposes only based on your entries and doesn’t cover all possible deductions, credits or life events.

Major life events that can affect your taxes

Life events like getting married (or divorced), having a child, buying a home, or changing income can all impact your taxes. These events can affect everything from your tax filing status, refund amount, or what you owe.  

If you’ve recently gone through a major life change, you may qualify for tax breaks when you file your return.

Marriage or divorce

Your tax filing status options are based on whether you’re married or unmarried as of December 31 of the tax year. According to the IRS, you cannot file jointly if the following applies: 

• You’re unmarried.
• You’re legally separated under a court decree. 
• You got divorced during the tax year and didn’t remarry by the end of the year. 

If you’re legally married at the end of the tax year, you can choose one of the following statuses: 

• Married filing jointly: You and your spouse report combined income and expenses on the same return.  
• Married filing separately: You each file your own return, reporting only individual income, deductions, and credits.  

If you’re unmarried, or legally separated but meet certain conditions, you may qualify to file as head of household if:  

• You didn’t file jointly with your spouse. 
• You paid more than 50% of all household costs for the year. 
• Your spouse didn’t reside with you for the last six months of the year. 
• Your primary residence was home to a qualifying dependent (such as your child) for over half the year. 

Your tax filing status affects: 

• Your tax bracket and tax rate 
• Your standard deduction amount 
• Your eligibility for certain tax credits and deductions 

While filing jointly as a married couple usually results in a lower tax bill, it’s not always the case. Weigh your options when deciding how to file.

Having or adopting a child

If you recently had or adopted a child, you could qualify for certain tax credits, such as: 

• Child Tax Credit: Get up to $2,000 per qualifying dependent child under age 17 if your annual income is no greater than $200,000 ($400,000 if filing jointly) for tax years 2024 and 2025. A portion of the child tax credit may be refundable if the taxpayer’s liability is already reduced to $0 before the full amount of the child tax credit has been applied. This is known as the Additional Child Tax Credit.
• Adoption Credit: Claim up to $16,810 in qualified expenses for tax year 2024 ($17,280 in 2025). You may also be able to exclude certain adoption benefits provided by your employer. 
• Child and Dependent Care Credit: Claim up to 35% of qualifying expenses incurred for dependent care so you could work or look for work. Eligible expenses up to $3,000 (for one qualifying person) and $6,000 (for two or more people) may be claimed for the credit. Eligibility depends on income and tax filing status. 

Having a child may decrease your federal tax withholding and potentially increase your tax refund.

Buying or selling a home

If you recently became a homeowner, you could be eligible to deduct: 

• State and local real estate taxes. The total deduction for state and local taxes, including income or sales tax, is limited to $10,000 per year.   
• Some or all your home mortgage interest, depending on your loan amount and when the loan originated. 

You must itemize your deductions to claim these deductions. If you sell your primary home during the tax year and meet certain criteria, you may be able to exclude up to $250,000 in capital gains from your income (or $500,000 if married filing jointly). Losses aren’t tax deductible.

Changing jobs or income

Changes to your employment or income could also affect your tax bill. These are the 2024 and 2025 individual tax rates for single filers: 

Tax rate	2024 tax year	2025 tax year
10%	Up to $11,600	Up to $11,925
12%	$11,601 to $47,150	$11,926 to $48,475
22%	$47,151 to $100,525	$48,476 to $103,350
24%	$100,526 to $191,950	$103,351 to $197,300
32%	$191,951 to $243,725	$197,301 to $250,525
35%	$243,726 to $609,350	$250,526 to $626,350
37%	Over $609,350	Over $626,350

If you earn under a certain amount, you may qualify for certain tax breaks. For example, you could claim up to $7,830 in the Earned Income Tax Credit (EITC) for the 2024 tax year ($8,046 in 2025). The exact credit amount depends on your income, tax filing status, and number of dependents. 

Changes to your tax withholding can also impact your tax bill. Withholding too much could get you a bigger refund. Paying too little could mean a tax penalty or larger tax bill. And then it’s important to note that self-employed individuals who expect to owe at least $1,000 in taxes generally need to pay quarterly estimated taxes. If your income or employment status changed during the year, you may need to adjust those estimated tax payments.

Choosing the right filing status after a life change

Your tax filing status affects your filing requirements, deductions, credits, and overall tax liability. But when major qualifying life events happen, it’s not always immediately clear which filing status to choose. 

Let’s break down the five tax filing status options and their implications: 

Filing status	Definition	2024 standard deduction	2025 standard deduction
Single	You’re unmarried at the end of the tax year, including those who are divorced or legally separated under a court decree.	$14,600	$15,000
Married filing jointly	You’re married, or your spouse passed away during the tax year. You must include your and your spouse’s income and deductions on a joint return.	$29,200	$30,000
Married filing separately	You’re married but choose to file separately. This may make sense if you want to keep tax liabilities separate, have high medical expenses, or owe student loans.	$14,600	$15,000
Head of household	You’re single and paid more than half of all living expenses for yourself and a qualifying dependent. You may also qualify if you are married under certain circumstances.	$21,900	$22,500
Qualifying Widow(er)	You have a dependent child and your spouse died within the past two years.	$29,200	$30,000

Choosing the right tax filing status can impact your tax bill. Lena Hanna, CPA, says, “Major life events can have a real impact on your taxes. Understanding how these milestones affect your return can help you make the most of the tax benefits available to you.”

The best option for you is usually the one that results in the lowest tax liability—but that’s not the only factor to consider.  

For example, you may choose to file separately even when married if: 

• You don’t want to be responsible for your spouse’s tax liability. 
• Filing separately means a lower overall tax bill. 
• Your spouse has past-due debts (like unpaid child support or student loans) that could reduce your tax refund. 

Note: Filing as head of household could get you a higher standard deduction and lower tax rate than choosing either single or married filing separately. You must meet certain conditions to qualify. 

Need help determining your tax filing status? TurboTax will guide you toward the best fit—and help you get the most tax savings.

Life events calculator: Estimate your tax savings

The TurboTax life events calculator is an interactive tool to estimate how life changes impact your taxes. We’ll get you a tax savings estimate based on: 

• Your filing status 
• Whether you’re 65+ or legally blind 
• Your adjusted gross income 
• Recent life events (like marriage, divorce, childbirth, or home purchase) 
• Other key changes (like changes in income or employment) 

It only takes about a minute to find out which tax deductions and credits you could be eligible for. If you have any questions, don’t hesitate to reach out to TurboTax for expert advice. 

To see how your life events can improve your overall tax picture when you file, check out our life events calculator.

How TurboTax makes tax filing easy after life changes

Whether you’ve recently gotten married (or divorced), become a parent, changed jobs, or purchased a home, life events matter in the realm of taxes. These big changes affect your tax filing status, deductions, and credits. 

TurboTax’s Life Events Calculator automatically calculates any tax savings based on your modified adjusted gross income (MAGI), life events, and your filing status. We’ll also help you determine the best filing status so you don’t miss out on any lesser-known tax benefits. Ready to file? TurboTax offers an accurate, simple tax experience that will get you the most tax savings—and the biggest refund—possible. Start your tax return with TurboTax today.