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How life events can change your tax status

On Behalf of | Mar 31, 2021 | Blog |

If you earned money over the course of a given year, there is a good chance that you’ll have to at least file an income tax return. Your marital status, sources of income and other variables will determine whether you owe money to the state of Washington or to the federal government. These factors will also determine how you file, when you file and the types of credits that you might be entitled to.

Did you start a business?

Those who earn self-employment income will need to file a business tax return each year. If you operate as a sole proprietor, you’ll file a Schedule C with your personal return. However, if the company is a partnership, LLC or corporate entity, you’ll need to file business forms separately from your personal Form 1040. An attorney who is familiar with relevant tax laws may be able to talk more about filing requirements for business owners.

Did you get married?

Married couples typically file a joint tax return that lists their combined income for the year. It’s important to note that those who file jointly may be subject to tax brackets that differ from those that apply to single filers. It’s also important to note that you are allowed to file an individual return even if you have a spouse.

Did you have a child?

The birth of a child means that you will be able to claim an additional dependent on your tax return each year. Furthermore, you may be entitled to tax credits that are based on your son or daughter’s age. Finally, it may be possible to deduct certain expenses related to raising a minor.

If you have any questions about your tax status, it may be a good idea to contact an attorney. The same may be true if you have any questions about any correspondence that you may have received from the IRS or state tax authorities.

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