Tax Changes

[Mbentivegna]

I have children that will no longer be claimable. What are the best resources to review to help me understand how I should change my current status to prevent from having to pay taxes with an increase in income and a loss of dependency benefits.

[rjs]

I don't know what you mean by changing your current status. If you have higher income and fewer dependents, you are going to pay more tax. There's nothing you can do to prevent that.

[SundayInSalem]

TurboTax has two excellent free apps to help adjust your withholding.

TaxCaster can help estimated your 2022 refund. If it looks like you will owe tax, you can fill out a new W-4 using the W-4 Calculator.

TurboTax does not have a tool to help with state tax.

[Mbentivegna]

I am looking to understand what I should be considering to decrease my taxable income with the loss of dependents. This such as increase to different types of retirement, or other ways to shelter your money.

[rjs]

If you are able to make or increase deductible contributions to a retirement plan, it will reduce your current taxable income. It could be a traditional IRA, a traditional 401(k), or other tax-deferred plan. This defers, but does not eliminate, the tax. The money that you contribute to the retirement plan will become taxable income when you take it out of the plan.

Other than that, there is not much you can do to reduce the amount of your income that is taxable.