(607NewsNow) — August brings significant opportunities for tax savings as we navigate through various major life events. This month, we’ll focus on three key areas: paying for your child’s college education, marriage benefits, and the tax implications of selling rental properties.
Paying for your child’s college education
As the back-to-school season approaches, many parents are looking at ways to fund their children’s college education. Fortunately, there are several tax credits and deductions available to help lighten the financial load. The American Opportunity Credit allows you to claim up to $2,500 for qualified education expenses for the first four years of higher education. Additionally, the Lifetime Learning Credit provides a credit of up to $2,000 for tuition and fees for any post-secondary education. Be sure to check your eligibility for these benefits, as they can significantly reduce your tax burden while investing in your child’s future.
Marriage benefits
Getting married is a joyous occasion, but it also brings changes to your tax situation. Married couples can benefit from a higher standard deduction, which means less taxable income. Additionally, you might find that filing jointly provides access to lower tax rates, potentially resulting in substantial savings. It’s a good idea to revisit your tax strategy after marriage, ensuring that you are making the most of these financial advantages.
Selling rental properties
If you’re considering selling a rental property, it’s essential to understand the tax implications involved. When you sell an investment property, capital gains taxes may apply to any profit made from the sale. However, there are strategies available to help minimize your tax liability, such as 1031 exchanges, which allow you to defer taxes by reinvesting in another property. Consulting with a tax professional can provide valuable insight into the best approach for your situation, helping you navigate the complexities of property sales effectively.
Plan ahead
As we move through August, it’s crucial to stay informed about the tax benefits associated with these life events. Whether you’re funding college education, getting married, or selling rental properties, proactive planning can lead to significant savings.
For a more personalized tax consultation, reach out today to Sprague & Jackson. You can give us a call or visit www.sprjac.com for more information!
