Life changes question

Hi Neneananba, thanks for joining us today!

1. If you itemize your deductions, you may be able to deduct property taxes, mortgage interest, loan interest, points and home improvements required for medical care when you purchase a home.

If you sell your home, you won't pay taxes on the first $250,000 as long you owned the home and it was your main home for at least two years within the five years leading up to the sale. If you file jointly, that amount increases to $500,000.

Here is a link for more details: https://ttlc.intuit.com/turbotax-support/en-us/help-article/homeowner-tax-credits-deductions/buying-home-mean-taxes/L0Y1a06Yx_US_en_US

2. New babies qualify for the entire year as a dependent. Even if they were born on December 31st. A dependent is someone who relies on another person for financial support, such as housing food, necessities and more. Typically this includes children or other relatives. You do qualify for a higher standard deduction with dependents.  Follow this link for additional details: 

https://turbotax.intuit.com/tax-tips/family/rules-for-claiming-a-dependent-on-your-tax-return/L8LODbx94

3. Qualified college expenses you pay for yourself, your spouse, or your dependents are eligible for the deduction. The Exceptions are if you can be claimed as a dependent on someone else's tax return you cannot claim the higher education deduction. If you are married filing separately you cannot take this deduction.

Follow these links for additional information:

https://turbotax.intuit.com/tax-tips/college-and-education/deduction-for-higher-education/L0krerdUK

https://turbotax.intuit.com/tax-tips/college-and-education/sending-kids-to-college/L0I7clLFg

4. The IRS strongly encourages most couples to file joint tax returns by extending several tax breaks to those who file together. In the vast majority of cases, it's best for married couples to file jointly, but there may be a few instances when it's better to submit separate returns. For the tax year 2023, most married couples under 65 filing jointly receive a standard deduction of $27,700, while couples filing separately receive $13,850. This explains the differences in more detail: https://turbotax.intuit.com/tax-tips/marriage/should-you-and-your-spouse-file-taxes-jointly-or-separately/L7gyjnqyM#GoTo-What-are-the-advantages-of-filing-jointly-

5. If you are considering moving to another state, you might want to consider states that do not have state income tax. Before you move, learn more about how that state taxes your income. This link is an excellent resource to guide you further:

 https://turbotax.intuit.com/tax-tips/state-taxes/taxes-and-moving-to-a-new-state/L4lOoXL90

6. If you decide to live abroad as an American expat and have taxable income, you still need to remain compliant with your US taxes. You must file a federal tax return and possibly pay US taxes if you earn above a minimum income threshold. For additional information please visit:

https://turbotax.intuit.com/tax-tips/general/taxes-for-expats/L26keX1RV

7. Contributions to a Roth IRA do not reduce your taxable income now but will reduce taxes later when you access the money. Tax deferred 401(k)s reduce taxable income now. For 2023 you can contribute up to $22,500 and for the Roth $6,500. There is an income limit for Roths. In 2023 it is $153,000 for single filers and $228,000 for joint filers. This link goes into more detail:

https://turbotax.intuit.com/tax-tips/retirement/boost-your-retirement-savings/L3lryQHVz

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