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Last Updated: Jul 2nd, 2008 - 21:15:22 |
(NAPSI)-Last year, Michelle W. moved to Ft. Lauderdale, Fla., where she bought her first house. She's not alone.
Each year, more than 90 million people experience an event that changes their life. So whether they get married, have a baby, go to college or retire, life's big changes can also mean big changes come tax time.
Here are some simple tips to get the most from five common life changes:
• Buying a Home
New home owners can take advantage of new deductions that may substantially reduce their taxes. In addition to mortgage interest, homeowners may be able to deduct property taxes, PMI payments, purchase points and money spent on home improvements. Best of all, the extra write-offs from owning a home are likely to help taxpayers itemize versus taking the standard deduction. Suddenly, state taxes and charitable gifts will earn tax-saving deductions, too.
• Getting married
A person's tax situation is high on the list of the many things that change when he or she ties the knot. Most couples will save thousands by filing jointly rather than separately. They may also be able to take an additional allowance on their W-4, keeping more money in their pocket.
• New Baby
The birth of a child guarantees major changes… as parents and as taxpayers. A new baby may deliver a $1,000 child tax credit every year until the child turns 17.
• Changing Jobs
Leaving a job and starting a new one has a number of implications. Taxpayers may be able to take an itemized deduction for the expenses they incur in looking for a new job, as long as they are not changing professions, and if changing jobs requires relocation, moving costs may be deductible.
• Starting a new business
Being self-employed has its advantages, especially at tax time. Taxpayers who are self-employed may be able to write off a wide variety of business costs paid during the year, including home office, vehicle use and entertainment expenses.
For people who do experience one of life's big changes, a good way to make sure they get every tax deduction they deserve is to use tax preparation software.
"With everything that changed last year, I was nervous about doing my taxes myself," said Michelle. "But I decided to give TurboTax a try and I'm so glad I did. It was easy."
Tax preparation software, like TurboTax®, makes do-it-yourself taxes easy, fast and accurate. TurboTax asks simple questions, puts answers on IRS-approved forms and guides taxpayers through their tax return step-by-step.
For more information about the tax impact of life's changes, go to www.turbotax.com.
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