When it comes to filing your income tax returns, several life changes can impact your figures. These milestones will typically open up opportunities for additional tax credits and other incentives. To ensure you're filing status is where it should be to take advantage of money-saving deductions, here are a few circumstances to keep in mind.

Common Milestones That Affect Tax Returns

1. Home Sale or Purchase

If you've sold or bought a home, the IRS provides a number of deductions that could reduce or even eliminate any tax obligations. Among them are deductions for paid property taxes, points, and mortgage interest. Married sellers who file their returns jointly may also be able to avoid paying taxes on gains of up to $500,000. An accountant who specializes in tax preparation can share all qualifying options for residential real estate buyers and sellers.

2. Marriage

One of the unexpected benefits of marriage is how the nuptials can affect income tax return filings. One of the main advantages is a potential decrease in tax rates. Married couples could also be eligible to claim more and higher exemptions and deductions. All of these benefits typically apply when a couple files as "married filing jointly" rather than "married filing separately." It’s best to consult with a tax specialist to find out which filing status is more advantageous.

3. Birth of a Child

Becoming a parent is arguably one of the most rewarding and underappreciated jobs. Uncle Sam understands and rewards parents with several tax credits. These include the Child Tax Credit and the Earned Income Tax Credit, which allow parents to claim deductions for expenses associated with education costs. Parents are also eligible for dependent tax deductions.

4. Attending College

Becoming a college student is another life event that can positively impact your tax return. For instance, the Lifetime Learning Credit provides $2,000 off educational expenses such as tuition, room and board, and books. The American Opportunity Credit works the same way. College graduates who took out student loans can deduct up to $2,500 in interest from their taxes.

Life is full of incredible milestones. Let the team at Selph and Friday, CPA, in Texarkana, TX, help you discover which credits and deductions could help reduce or eliminate any tax obligations. With nearly 30 years of service to the community, the locally-owned agency specializes in providing customized expertise and impeccable tax return preparation. To schedule an appointment, call (903) 792-0281 today. Visit the website to learn about the firm's full suite of services for both individuals and businesses.