Life Events Advisor is a free tool by TurboTax that basically lets you know how life changing events will impact your taxes. Life changing events can be as following:
- Getting married
- Buying a house
- Having a baby
- Job Change
- Moved to a new place
- Starting eductaion
For example if you had a baby, you would become eligible for filing as Head of Household which gives you a higher Standard Deduction. You also get an additional exemption for $3650 which reduces your taxable income. Also you will be eligible to receive child tax credit, Child Care Credit and Earned Income Credit (EIC). Child Tax Credit gives you an additional $1000 which can reduce your tax liability. The part of Child Tax Credit which is not used is refunded to you as Additional Child Tax Credit. If you paid money for qualified child care while you were working, then you can get a non-refundable credit which will reduce your tax liability. Depending upon your earned income you may also qualify for Earned Income Credit (EIC). The maximum EIC you can get with one child is $3050.
When you go to the Life Events Advisor Page, you will need to enter your basic information life filing status and earned income. Then choose the event that took place in your life and the Events Advisor will show you how this event will impact you in terms of taxes. Like does it help you get more deductions or credits. Also check out IRA Tax calculator, and TurboTax free.
The interface of the application is very simple and user friendly. Once you check it out you will know what to do exactly. Plus it will help you to have all the information beforehand so you could prepare yourself before filing taxes. Also by being well informed you would know what to expect.
Try Life Event Calculator Free.