The most significant events in life generally have the biggest effects on our wallets. Whether you’re starting a small business, welcoming a new baby, purchasing a new home, or getting married, your bank account will be majorly affected. It’s likely to show these changes in several ways.

However, how do significant life events alter your financial and tax status? We will help you figure it out! Have a look at the following circumstances and evaluate whether they’ll impact your taxes before using past returns to assist with this year’s return.

 Bride and groom holding hands

Wedding Bells!

As you desperately wait to say “I do”, check to see if your filing name corresponds to the one on your national insurance card. This is an important thing that most tax accountants will tell you before you tie the knot. You should also update your address if you plan to relocate; you can do this as you submit your paperwork.

The way you and your partner choose to file in that year also matters because you can either do it together or separately. You’ll often receive lower tax rates and more deductions if you decide to file jointly. But, there are several circumstances where getting married can result in higher taxes. Make sure to ask your tax advisor to go over this important detail with you.

Growing Your Family

Adding a new person to your family significantly impacts you, and not just as a disrupted sleep schedule or increased grocery shopping. Whether you adopt a child or welcome a new baby into the world, you should immediately consider their national insurance number.

Whether you’re doing a self-assessment tax return or getting the help of a tax accountant, you’ll be able to claim your child on your next tax return. You can also get some deductions and child tax credit for some childcare costs. Adoptive families may be eligible for extra credits, which might cover things like adoption fees, legal charges, and essential travel costs.

Bought A New House

Just bought a house? This could be a good moment to consider itemizing your returns if you haven’t previously done so. There are few deductions applicable to you, like real estate taxes, private mortgage insurance, and much more. Not a big fan of itemizing? Well, that’s okay. No need to panic! You can still take advantage of benefits like residential power allowances.

Dealing With A Partner’s Death

A question that hurts the soul but is at the same time unavoidable. “What will happen to my taxes after the death of my partner?” Well, if you meet the requirements to file as a widow, you can choose this status for nearly two years after your spouse’s passing. The people who get this filing status get the same deduction as “joint filing”. However, you should be aware that if you remarry within a year of your spouse’s passing, you won’t be able to claim this deduction.

Do you need help with filing your taxes? IBISS & CO is one of the top tax accounting firms in London, with some of the most reliable and trustworthy chartered accountants and business advisors. Reach out to us to take a look at our various accounting services.

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