Life is full of milestones, and while they bring joy and new beginnings, they can also significantly impact your financial and tax situation. Whether you’re welcoming a new baby, entering or ending a marriage, each change comes with potential tax implications. Here’s how these milestones affect your taxes and how we can help you through them.
1. A New Baby
A new addition to your family is not just heartwarming—it also brings tax benefits. Parents can claim a dependent exemption, utilize the Child Tax Credit (up to $2,000 per qualifying child), and explore credits for childcare expenses. However, managing these benefits can be complicated, especially when accounting for income thresholds or savings plans like 529 accounts. Favored Financial Planning can help optimize these benefits, ensuring your family maximizes savings for your child’s future.
2. Marriage
Marriage often changes your filing status, affecting tax brackets and deductions. Couples can file jointly or separately, each with unique benefits depending on income levels and other factors. Additionally, newlyweds should consider how combining finances, adjusting withholdings, or managing joint assets may impact their taxes. A tailored plan from Favored Financial Planning ensures that couples navigate these changes seamlessly while building a secure financial future.
3. Divorce
Divorce introduces complexities such as alimony, child support, and the division of assets, all with distinct tax implications. For example, alimony is no longer deductible for the payer or taxable for the recipient (post-2018 agreements). Decisions around tax-advantaged accounts or who claims dependents require careful planning. Favored Financial Planning provides expert guidance during this emotional time, helping you handle the financial transitions with confidence.
How Favored Financial Planning Can Assist
We provide personalized services to help our clients navigate these life changes. By focusing on tax-efficient strategies and sustainable financial planning, we are here to help you remain financially secure through life’s transitions. From optimizing tax credits to adjusting investment strategies, we support your unique needs.
Get in touch with Favored Financial Planning today to take control of your financial future. Call (336) 422-6734 to schedule a consultation with us. Whether you’re adjusting to a new chapter or planning for the future, we’re here to support you every step of the way.
