September 10, 2022 | Posted in:

Tax Planning: A Life Changes Checklist

For the unwary, major life decisions can create a large and unexpected tax bill.

Here are six life changes with tax implications that could surprise you.

Getting married or divorced

Marriage means a new tax status, new deduction amounts and income limits and a potential marriage penalty. Divorce has added complexity including untangling assets, alimony, child support and dependents.

Growing your family

Bringing home a new child comes with some tax breaks which can help offset the new expenses. If you are adopting, you get an additional tax credit.

Saving or paying for college

There are many different tax breaks such as the American Opportunity Tax Credit, 529 plans and student loan interest deductibility. It can be tricky, so work with a tax professional.

Changing jobs or getting a raise

Each additional dollar you earn gets taxed at your highest rate and might even bump you to the next bracket. If you lose your job, accrued vacation or a severance package will likely add to your taxable income.

Buying a house

Down payments made with some Roth IRA funds or 401 (k) loans can have tax advantages. There are also tax credits for making energy-saving improvements. Deductions are available for property taxes and interest payments, if you itemize.

Planning for retirement

Some factors to consider include employment status, current income, available cash, future earnings and tax rates, retirement age and Social Security. Don’t omit key details from your plan and consult a professional about this complex and important decision.


Dealing with one of these life surprises and need assistance handling the tax implications? Contact an Alloy Silverstein advisor today!


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