How Some Life Changes Can Mean Tax Savings

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If you’ve recently experienced a big change in your life, such as getting married, buying your

first home or having your first baby, you might not know that it can have a positive impact upon

your taxes. While you might be caught up in the newness of your situation (and nobody could

blame you for that!), your taxes might be furthest from your mind, but it’s important to know

that recent life changes could save you money when it comes to tax time.


Here are 3 of the most common life changing events that many individuals experience at least

once, along with how they might prove fruitful when it comes to filing your taxes:


Getting hitched:


Once you’re married, you and your new partner can file your taxes jointly, and there is every

chance that you may see lower tax liability than when you were single. Often referred to as a

‘marriage bonus’, federal tax rates are lower for couples who file jointly, compared to those rates

applicable for single filers, and bigger tax deductions and credits may also be applicable for

married couples.


Stepping onto the property ladder:


While buying a new home is often a huge financial outgoing for many, it can get you some of the

largest tax savings, too. Not only can you deduct your home mortgage interest and property

taxes, but you can also deduct the points that you paid to secure the loan.


Adding a new member to your family:


Having a baby can mean that you’re eligible for new tax deductions and credits, such as the child

tax credit and childcare credit. So, while there are many costs associated with adding a new

member to your family, the tax savings that you may be entitled to, could help you manage your

finances better.


Depending upon the type of life change you’ve recently experienced, your emotions may be

all over the place, and taxes could easily be the last thing on your mind. However, while this

is understandable, it’s important to think carefully about whether you can make any

savings on your taxes due to your new personal circumstances. If you’re unsure whether

you might qualify for tax savings, or simply want to discuss what the IRS need to know

about a recent life changing event, reach out to an experienced, tax professional who can

help guide you through any new processes that might apply to you, and advise you as to

any relevant tax savings.


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