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5 Common Life Changes That Should Prompt a Tax Plan Review
Life is constantly changing — and when it does, your tax strategy should change right along with it. Major life events can significantly impact your income, deductions, credits, and overall tax liability. Ignoring these changes could lead to missed opportunities or, worse, an unexpected tax bill.
Whether you’re living in Rochester, NY, or Greece, NY, it’s important to understand when to revisit your tax plan. Here are five common life changes that should prompt you to reach out to a trusted CPA, like Nacca & Capizzi, to ensure you stay financially prepared and tax-efficient.
1. Getting Married or Divorced
A change in marital status is one of the most significant events for tax planning.
When you get married, your filing status may change from single to married filing jointly or separately. This impacts your tax brackets, deductions, and credits. On the other hand, if you are going through a divorce, you may face changes to your filing status, potential alimony implications, and child-related tax credits.
Making the wrong move here could cost you thousands over the years.
Contact Nacca & Capizzi to review your tax strategy after a marital change.
2. Having a Child
Welcoming a new child changes everything — including your taxes. Parents may now qualify for tax credits like the Child Tax Credit and the Child and Dependent Care Credit. You may also be eligible to adjust your withholdings to reflect the new dependent.
Additionally, long-term planning for your child's education with tax-advantaged accounts such as 529 plans is a smart financial move.
3. Buying or Selling a Home
Homeownership brings new tax considerations. Mortgage interest, property taxes, and points paid at closing may be deductible, which can reduce your taxable income. Additionally, selling a home may have tax consequences, especially when it comes to capital gains.
Whether it’s your first home or you're downsizing, it’s crucial to review your tax plan and maximize homeownership-related deductions.
Talk to Nacca & Capizzi about how buying or selling a home impacts your tax situation.
4. Starting or Changing Jobs
A new job or a career shift can lead to changes in income, benefits, and retirement plan contributions. You may need to update your tax withholding to avoid surprises next tax season.
If you become self-employed or start a side business, additional tax planning will be needed for estimated taxes, business deductions, and retirement savings strategies for entrepreneurs.
5. Retirement or Receiving Inheritance
Retirement brings important tax considerations, including withdrawals from retirement accounts, Social Security taxation, and Required Minimum Distributions (RMDs).
Similarly, receiving an inheritance or large sum of money can create tax complexities you may not be prepared for — including possible estate or inheritance taxes.
Stay Prepared with Nacca & Capizzi
Life never stops changing — and neither should your tax strategy. Major life events can dramatically affect your tax position and financial plan. The best way to stay prepared and avoid costly mistakes is to regularly review your tax situation, especially after moments like these.
At Nacca & Capizzi, we help individuals and families in Rochester, NY, and Greece, NY stay ahead of the curve. From navigating tax law changes to maximizing deductions, our team is here to make sure your tax plan works for your life — today and tomorrow.
Call us at (585) 225-9290 or schedule your tax review online today.
Disclaimer: This article provides general financial guidance and should not be considered personalized tax advice. For tailored recommendations based on your individual situation, contact Nacca & Capizzi.
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