How Major Life Events Can Affect Your Taxes
Major life events often bring tax changes with them. Marriage, a new child, divorce or the loss of a loved one may affect your filing status, withholding, and available tax benefits.
Here are a few common events to keep in mind.
Marriage
Getting married may change your filing status, tax withholding and eligibility for certain tax benefits.
After marriage, report any name change to the Social Security Administration. You should also update your address with the U.S. Postal Service, your employer and the IRS.
Review your withholding as well. You may need to submit a new Form W-4 to your employer.
Birth or adoption of a child
Welcoming a child may make you eligible for several tax credits. These may include the Child Tax Credit, Adoption Credit or Child and Dependent Care Credit. Each credit has its own eligibility rules.
In most cases, both the taxpayer and child must have valid Social Security numbers before a credit can be claimed.
Divorce or legal separation
Divorce or legal separation can affect several parts of your tax return. Your filing status may change. It may also affect who can claim dependents and which credits or deductions are available.
Changes to your income or household may also affect withholding. Review your Form W-4 and update it when needed.
Death of a spouse or family member
The death of a spouse or loved one can affect filing requirements and filing status.
A final individual income tax return is generally filed for the deceased person. The return should report income received through the date of death.
Eligible credits and deductions may still be claimed on the final return.
Review your tax information after a major change
After any major life event, review your withholding, update your personal information, and keep related records. IRS tools at IRS.gov can help you understand how these changes may affect your next tax return.
You may also want to speak with your tax advisor before filing. A timely review can help prevent surprises.
