This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Life Events That Taxes Can Help or Hurt

"We just had the Tax Relief Act of 2010 that did extend many favorable tax provisions through 2012," Perlman says. "But what happens after 2012 is a big question mark. Right now, we have marriage penalty relief, and things like that are all important to think about. If you get married and have your child in 2013, you may not have so much. Of course it is not an either/or choice, because if you get married and have a child this year, hopefully you will still be married and have the child in 2013. You are going to be faced with those unknowns regardless of what you do. But these are things to consider. We have some historically great tax relief right now, and we don't know if we'll have it in the future."

For couples looking to expand their family through adoption, the new tax laws improve the existing incentives. The amount of the adoption credit increased by $1,000 and in 2011 is slightly more than $13,000. The credit is also fully refundable.

"A nonrefundable credit means that the credit can't be more than your tax liability for the year. You can carry it forward, but if you are a lower-income or middle-income person with many children and expenses, a nonrefundable credit may not be a great benefit to you," Perlman says. "With 'refundable,' you get that check in the mail."

There is also a new provision for those adopting special-needs children. It allows parents to get the credit regardless of their expenses; for other parents, it is weighted against the costs of raising the child.

The classification of "special needs" does not necessarily mean the child has any kind of disability. Each state has its own laws -- in some, for example, it can apply to adopting a sibling group, while adoption expenses in and of themselves are not deductible.

2. Going back to school
There are a variety of tax credits, deductions and savings plans available to taxpayers to help with the expense of higher education. In many cases, adults returning to academia can benefit just as their children's college education does.
2 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
HRB $33.34 0.76%
AAPL $122.37 -0.50%
FB $95.21 -1.84%
GOOG $632.59 0.10%
TSLA $266.79 1.13%

Markets

Chart of I:DJI
DOW 17,745.98 -5.41 -0.03%
S&P 500 2,108.63 +0.06 0.00%
NASDAQ 5,128.7850 +17.0520 0.33%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs