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Life-Changing Events
Ten reasons for a mid-year tax review
Things happen throughout the year that may affect
your finances and your tax situation. In most cases, it’s better to visit
your tax preparer as soon as possible so you can discuss taking action to
prevent any unpleasant tax consequences. Here are ten good reasons to
schedule a mid-year review:
1. A change in your marital status. A marriage or divorce can have a
direct impact on the amount of exemptions you can claim and can alter the
amount of your refund or balance due.
2. The birth of a child. You cannot claim a child as a dependent unless
you have a social security number for that child.
3. The death of a spouse or other family member. If you inherit income,
such as an IRA or pension plan, you have options for taking distributions.
4. The sale or purchase of a home.
5. The decision to retire or continue working. Depending on your age and
other income, your social security benefits may be taxed or reduced.
6. The sale of investments. Timing a sale to reap the most tax benefit
should be decided before taking action.
7. Contributions to a traditional IRA or Roth IRA. There are tax
consequences to both options.
8. Charitable contributions. Whether or not you can itemize deductions may
determine when it’s best to make contributions.
9. Changing jobs. In some cases, your moving expenses are deductible if a
new job takes you to a new location.
10. Planning for your child’s college education. There are several
tax-favored options available for college savings.
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