TurboTax 2020 Life Events Calculator
As we all can attest, life changes in the blink of an eye at times of our life, whether were ready for it, or not! Fact is, as we move through life, our health, wealth, family, and friends all have influence on changes that may be good, or bad. Saving money on your tax season costs by making everyday adjustments when necessary in our tax planning, can help alleviate up coming tax season issues before they become a problem.
The TurboTax TaxCaster Income Tax Calculator is one tax season tool that can help us stay on top of out tax liabilities. However, good planning around changes in our life can be beneficial when it comes to tax breaks and credits that can help us lower our tax bill significantly.
There are many ways that major life events affect your taxes.
Millions of Americans find themselves unprepared for the unexpected changes in their tax bill due to changes in their life.
If you experienced a significant life change this year (got married, had a baby, bought a house, new job, etc.), the TurboTax life events calculator will reveal many tip on how to handle these changes properly for income tax purposes, and keep the surprises at bay.
TurboTax Life Events: Family Changes
For getting married, there are several issues you need to address.
- Use form SS-5 to alert Social Security if you changed your name
- Adjust your W-4 Withholding for both spouses paychecks
- Coordinate your fringe benefits for opportunities to save
- Review your medical plan options for you and your spouse
For having a child, there are many tax breaks. These tips can help you discover many tax benefits that come with your new bundle of joy.
- Apply for a birth certificate to open up tax deduction opportunities
- Get a Social Security number for your child
- Claim your child as a dependent on your tax return.
- Adopted? File Form SS-5 with the Social Security Administration and provide proof of the child's age, identity and U.S. citizenship.
- Claim the dependency exemption for your son or daughter
- Claim the $1,000 child tax credit for each child until they are 17. Credits reduces your tax bill dollar for dollar, so it lowers your tax bill by $1,000
TurboTax Life Events: Buying a Home
There are many opportunities to lower your tax bill with personal residence tax deductions which can include:
- Your city and state property taxes are federally deductible
- The mortgage interest on your primary residence, and secondary residence (secondary home limits may apply)
- The interest on a home equity loan or home equity line of credit up to $100,000 borrowed, regardless of what you use the loan for
- The points you paid when purchasing your home mortgage
- Home improvements that were required for medical care
- Possible energy saving improvement deductions
For most people, the biggest home deduction is for mortgage interest. How do you figure out how much you've paid in mortgage interest during the year? Your lender should supply you with a statement (Form 1098) by the end of January listing the mortgage interest you paid for the year.
Form 1098 will show you the proper amount you can deduct on your tax return for mortgage interest paid.
The TurboTax TaxCaster can help you with additional tax breaks and benefits to get you on track for a lower tax bill this year.