We’re already halfway through 2022! A lot can happen in a year; you could have changed jobs, your kids are growing up, and maybe you’ve even experienced marital changes like divorce. It’s hard navigating these changes, especially when it comes to taxes.
So, how do these big life changes affect your taxes? If you are divorced, you may want to adjust your W4 to avoid owing a big tax bill at tax time. You will no longer have the MFJ standard deduction which is make more of your income taxable. After 2019, alimony is no longer taxable to the recipient and no long a deduction for the payee. If you’re responsible for any children post-divorce, this could also affect your taxes if you’re the one to claim them. Typically, the custodial parent (one who has then children for more than half the year) would be entitled to claim the children and receive a deduction, but there are exceptions and tie-breaker rules that apply in these cases.
When your child(ren) turn 17, you will lose your Child Tax Credit even if you’ve claimed them in your taxes. You may still claim the child, however the tax deduction is less without the Child Tax Credit.
Changing jobs is another life event that can affect your taxes. If you’ve left a job and started a new one, then it’s a good time to check your W4 and make sure you have enough federal withholdings so you can avoid an unwanted tax bill. You can use the Tax Withholding Estimator to help you determine how much federal withholdings you have.If you have any questions, please contact your local tax professionals at Meadville Tax Service by calling 814-333-2488 or emailing firstname.lastname@example.org. We’re happy to help!