Whether we like it or not, it’s time to start preparing taxes. It’s important to get a head start, especially if you had a life event in 2016 that will significantly change your taxes. TaxSlayer, a leading provider of e-file software, recommends tax payers pay particular attention to the following four events:
- Marriage: If you got married, you have determine whether to file jointly or separately. Keep in mind that your combined income as a joint couple may lead to a higher tax bracket, so you may owe additional funds if you did not adjust your withholding. In addition, if you changed your name, make sure it matches on both your taxes and social security card.
- New Child: A new baby brings new tax credits. Be sure to claim all your dependents to ensure you receive a proper return. If you adopted a child, look into the Adoption Taxpayer Identification Number. Also, don’t neglect day-care charges, which qualify for child-care credits.
- Purchased a Home: A homeowner’s interest and real estate taxes are tax deductible, but they need to be itemized in order to take advantage of them. In addition, some closing costs are tax deductible, but others are bundled into the cost of a new home.
- Started/Sold a Business: For the entrepreneurs out there, starting or selling a business can have a significant impact on your taxes. A new business allows you to deduct startup business costs, which can lead to significant savings. On the other hand, selling a business comes with some steep costs, so make sure you have enough cash on hand to cover them.