Tax Tips for 2018: Life Events
For most people, nothing much changes year-to-year that will severely impact your taxes. But on occasion, you go through a life event — such as marriage, divorce, death, job loss, the birth of a child or the purchase of a new home — that really makes a difference.
For instance, in the event of a divorce, you’ll need to figure out things such as how to divide credits and deductions, and how to account for dependents. Another important consideration is your filing status. If you support a dependent for more than half the year, you may be eligible to use “head of household” status, which will provide more tax benefits.
A life event might also simply be celebrating your birthday. If you’re 59 1/2 or older, you can withdraw funds from your retirement accounts without having to pay the 10% early distribution penalty. However, when you reach 70 ½, you will be required to make minimum withdrawals, called required minimum distributions.
If you experience a major life event, you need to get a sense of the potential tax implications. A quick check at a site like TurboTax or a visit to H & R Block Inc (NYSE:HRB) can yield some helpful advice and guidance.