12 Ways to Save on Taxes Through Life’s Transitions (1440 × 600 px)(1)
12 Ways to Save on Taxes Through Life’s Transitions (411 × 600 px)

12 Ways to Save on Taxes Through Life’s Transitions

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  • Published Oct 19, 2023 - [Updated Sep 17, 2024]
  • 3 min read

Taxes are part of almost everything we do in life. There are, however, ways to save on your taxes through life’s transitions. 

Here are 12 tax tips to help you save through major life events:

Table of Contents

EducationThe Working WorldFamily Life

Education

  1. Deduct your tuition. Education expenses may be tax deductible if they maintain or improve skills required in your employment.

2. Invest in a 529 plan to save for your children’s education. You won’t get a tax deduction, but there won’t be a tax on the earnings and growth of those funds if they are used for education.

3. Tally the cost of books and necessary supplies purchased for your education. Expenses directly related to your college education may be tax-deductible and may put more money back in your pocket.

The Working World

4. Invest in 401(k)s and IRAs as soon as possible. Small contributions growing from an early age are more valuable than large contributions made years later.

5. Learn about your company’s fringe benefits, such as tuition assistance plans, free employee counseling, mass transit commuting assistance, Health Savings Accounts, and other tax-free perks.

6. Get next year’s refund now by adjusting your withholding so that you break even with the IRS at the end of the year. If you need help saving, have money automatically deposited to savings from each paycheck.

7. Only borrow from your 401(k) in an emergency. The interest you pay on the loan won’t be tax deductible, and you will lose the capital appreciation you’d enjoy if you’d left it invested in the plan.

Family Life

8. Put tax-free money into your employer’s dependent care plan. Though this will reduce your child and dependent care credit, it’s still a good financial move for most taxpayers.

9. Claim the Child Tax Credit on your taxes. The Child Tax Credit is up to $2,000 for each dependent child under 17 and is available if your income is up to $200,000 single or head of household (up to $400,000 if you are married filing jointly) TurboTax will ask you questions about your dependents and give you the deductions and credits related to your dependents that you’re eligible for or you can fully hand your taxes over to a TurboTax Live tax expert who can do your taxes from start to finish.

10. Gather your receipts for dependent care. You may be able to claim the Child and Dependent Care Credit even if you don’t work, if your spouse works and you are a full-time student or disabled. Don’t overlook expenses eligible for the Child and Dependent Care Credit such as nursery school, after school programs, and daycare.

11. File jointly. Married couples filing separately are barred from many tax deductions and credits, so unless you are trying to distance yourself from a tax-evading spouse or a soon-to-be-ex, a joint tax return is your best move. TurboTax helps you select the filing status that you are eligible for based on your entries.

12. Take advantage of the Other Dependent Credit for non-child dependents. If you take care of a non-child dependent like a parent, grandparent or even a friend, you may be able to claim the Other Dependent Credit that is $500 per eligible dependent.

Don’t worry about knowing all of these tax rules. You can meet with a TurboTax Full Service expert who can prepare, sign and file your taxes, so you can be 100% confident your taxes are done right. Start TurboTax Live Full Service today, in English or Spanish, and get your taxes done and off your mind.

Ginita Wall
Ginita Wall

Written by Ginita Wall

More from Ginita Wall

293 responses to “12 Ways to Save on Taxes Through Life’s Transitions”

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  1. I feel that it is best to owe the IRS a modest amount at the end of the year for two reasons:

    You are able to use your money longer than if its is withheld sooner

    I feel that the IRS bureaucrats look for any minute problem they can find if they have to refund your money, rejecting your first return. My 2022 return was rejected for a $129 foreign tax credit.
    It turned out that the rejection was incorrect, but my refund was delayed 4 months

    Reply

  2. I have used turbo tax site for over 5+yrs and this the first time I haven’t received my 2020 refund. With that been said I’m gonna continue too use turbo tax. I give them a 5 plus thumbs up

    Reply

  4. My husband had to quit work due to medical issues in 2014 and we are still waiting the outcome of his application for SSDI. He made less than $9000 in 2014. Do we have to file taxes with this income? Can I file separately with my job and not have him file taxes at all due to his low income received in 2014?

    Reply

  7. I am 59 will be 60 in july, was fired from my job in feb of 13 and cashed 401 in december , can you give me a heads up on this?

    Reply

  8. Hello, I have a question I am the only person who works in my family of 4. I have 2 children and one of them is disabled and I also have a disabled wife who I have to care for, and have to pay 180 dollars a month for her doctors appointments. In addition she is a diabetic and also have to buy insulin for her. What is the best way to claim our taxes. Thank you very much for your help. Robert M

    Reply

  9. My cousin, who turned 19 in Sept 2013, lives with me. She is a full time college student. She earned approximately $4500 collecting social security and has $10000 for a life insurance policy due to her mother’s passing.
    Can I claim her as a dependent? Thank you

    Reply

  10. My husband and i have been married for 4 1/2 years, and he owes back childsupport arrears only, but a portion of his paychecks are getting garnished weekly will the federal tax board still take/intercept our joint federal return if we file together??

    Reply

  11. I was married in June 2013, both my husband and I have paid interest on student loans this last year. He also took out another student loan. Would it be a better idea for us to file Married Jointly or Married and Separate?

    Reply

  13. We sold our property in 2013 after living there for 12 yrs, and after investing $130,000 in upgrades during this period. We made a profit of $245,000 on the sale and applied $200,000 of this to purchase of our new home also in 2013. We rented a place for $800.00 a month for 5 months until we moved into our new home and additionally paid $425.00 per month on storage.
    What do we qualify for as a tax write-off / deduction in 2013?

    Reply

  14. I draw SSI. $710.00 per month. I pay $550.00 per month rent which includes everything. I get food stamps for myself. Also I have medical expenses and driving back and forth to the doctors which most are 22 miles from me. should I file or not?
    Thank You

    Reply

      • I posed the following question previously with no response.
        Mary F. said: on January 22, 2014 at 10:34 am
        Two part question:
        1. I attended college in 2013, can I claim mileage as an education expense?
        2. My spouse was laid off in 2013 and we accepted jobs over 100 miles from our residence. We had to pay for a mortgage and an apartment during that time.Can the cost of the 6 month apartment lease, while waiting for our home to sell, be deducted?

      • I have two children living at home both claim them selfs. We pay tuition on one and medical supplies for diabetes for the other can we deduct any of these supplies or tuitions ages are 24 and 27

    • Unless you live in Michigan, where you would probably qualify for a rent credit and possibly a Home Heating Credit.

      Reply

  15. I just got married on Jan 25, 2014. When I file my taxes should I file single or married? And my husband has been in prison from 2009-march of 2013. He worked while in prison. Can he file taxes on that?

    Reply

    • Melissa,
      If you were not married on December 31, 2013, you will file your return as single (or head of household, if you have a dependent child).
      Your husband needs to file his own tax return, claiming the income he earned in 2013. If his income was less than $10,000 he does not need to file a return.

      For 2014, you and your husband will file a joint tax return, or you may choose to file two separate returns using the filing status of married filing separately. Filing separately usually results in a higher total tax, but you can use TurboTax TaxCaster to help you decide what is the best status for you. Here is the link to TurboTax TaxCaster https://turbotax.intuit.com/tax-tools/

      Mary Ellen

      Reply

      • I posted the following questions previously with no response:
        Mary F. said: on January 22, 2014 at 10:34 am
        Two part question:
        1. I attended college in 2013, can I claim mileage as an education expense?
        2. My spouse was laid off in 2013 and we accepted jobs over 100 miles from our residence. We had to pay for a mortgage and an apartment during that time.Can the cost of the 6 month apartment lease, while waiting for our home to sell, be deducted?

  16. My spouse taxes are going to be garnish due to student loans default should I file married but seperate to avoid my taxes being taken

    Reply

  17. I pay my mother $400 a month to take care of my infant son, she is not license. can I still deduct child care expenses and claim eic?

    Reply

  18. I just got married this year 2013 and my husband has a daughter and i have a son, we were both single parents. how should we file this year; jointly or married seperately? Or should wait till next year to file jointly. what is the best advantage for us?

    Reply

    • Hi Michael,
      You have to file as a married couple the year you are married. Whether you file as married filing jointly or separately will depend on your income and dedcutions. You can use TurboTax TaxCaster to get an estimate of whether filing jointly or separately is better for you. You can also try both scenarios in TurboTax Online. Here is the link to TurboTax TaxCaster https://turbotax.intuit.com/tax-tools/
      Thank you,
      Lisa Greene-Lewis

      Reply

  19. I am in a chapter13 payback program . Got married after filed . I will owe 600 in fed taxes wife will get back 1100 . My return will go to trustee for him to decide if I can retain any monies back. Should I file married filing separate to keep the refund coming back to her , then pay my liability?

    Reply

    • Angela,

      If you are paying interest on your school loan, you will be able to deduct that from your income. TurboTax will help you with this in the Education section of Deductions.

      Mary Ellen

      Reply

  25. Two part question:

    1. I attended college in 2013, can I claim mileage as an education expense?

    2. My spouse was laid off in 2013 and we accepted jobs over 100 miles from our residence. We had to pay for a mortgage and an apartment during that time.Can the cost of the 6 month apartment lease, while waiting for our home to sell, be deducted?

    Reply

  26. I am 25 and my fiance is 31. We’ve lived together since may of last year. I worked and he didn’t which meant I paid all our bills. Can i claim him on tax return?

    Reply

  27. I ask this before but gave u the wrong email address. Can my wife and I deduct our grandson as our dependent on our tax return. He lived with us all of 2013 and worked very little. He is 26 years old

    Reply

  28. Can my wife and I deduct a dependent for our grandson who lived with us all of 2013 and he made very little money. He is 26 years old

    Reply

  29. My mother-in-law lives in a nursing home and is on Medicaid. She does receive Soc Sec every month in the amount of $1,141 – however that is used to pay the nursing home, and medical insurance. Anything else she needs we pay for. Can we claim her as a dependent?

    Reply

  30. Me and my husband got married July 13, 2013. I lost my job July 5, 2013. Can my husband claim me as a dependent or injured spouse. Also we have 2 separate accounts set up and now I’m wanting to know if I file on each account as married filing joint or do I just use one account for both of us or create a new one.

    Reply

    • Yolanda,
      You and your husband have two choices for filing taxes now that you are married. You can file Married, filing jointly, or Married, filing separately. A spouse is never a dependent on a joint tax return.
      Injured spouse is a term that refers to a tax injury, not a physical injury.
      If you already have a TurboTax account, you should use that account, change the filing status, and add the spouse to the return. It doesn’t matter which account you start with, but you should plan to list the taxpayer and spouse in the same order every year going forward. So if you use your TurboTax account, you will be the taxpayer and your husband will be the spouse.

      Mary Ellen

      Reply

  31. Great! you’ll file a Schedule C as independent contractor. All registration fees, samples, business-associated mileage can be deducted. If you clear less than $600, then the income is simply reported as Hobby Income.

    Reply

    • Selene,
      You can deduct expenses as an independent contractor, but if you are in business, you do not report your income as Hobby Income. If you clear less than $400, you do not have to pay any self-employment tax.
      The hobby rules don’t have anything to do with the amount of income you receive. If you report income as hobby income, the expenses are all deducted as miscellaneous itemized deductions on Schedule A. Only miscellaneous itemized deductions that exceed 2% of your adjusted gross income can be deducted, and only if you can itemize deductions instead of taking the standard deduction. You are also limited to deducting hobby expenses by the amount of hobby income you make. Hobbies cannot create a tax loss.
      Hobby income is not subject to self-employment tax.

      Reply

  32. I have a few questions. Can I file monthly costs of internet services for school (online classes)? I am in the process of going to court for child custody and was appointed a Guardian at Litem for my child. Are the fees for the lawyer or the GAL deductible?

    Reply

    • K,

      The internet costs for taking online classes will not be deductible. Legal fees for child custody and being appoint a GAL are not deductible, either.

      Mary Ellen

      Reply

    • Lori,

      Yes, a 17 year old still qualifies as your dependent even if he files a tax return to report income from a part time job. He cannot claim an exemption for himself on his return, though.

      Mary Ellen

      Reply

  34. Can my husband claim any part of my cobra health coverage we reside in mass. Thank you for any help you can give us Debra carvalho

    Reply

    • Debra,

      Cobra premiums qualify as medical expenses and can be deducted on Schedule A of your tax return.

      Mary Ellen

      Reply

  35. I’m a foster mom who has cared for 6 different children over the last year, but none for more than 5 months. Is there a way to claim any of them?

    Reply

    • Tashonda,

      There is no way to claim a foster child as a dependent if they did not live with you for the entire year.

      Mary Ellen

      Reply

  36. I am on social security disability and I made more money last year than my girlfriend so could I claim r son to get the earned income credit also we both pay child support on other kids can we claim that as well for the unearned income

    Reply

    • If it’s your son, when you say “r” son, then yes. You may qualify for earned income credit independent of having a child, since that is income-based limited by how much you earn. You could also potentially take credits on the children for whom child support is being paid, as well. It would be a great idea for you to discuss you tax situation with a tax professional in their office so that you understand about earned and unearned credit, and rights of non-custodial parents who pay support.

      Reply

  37. I am on social security disability and I made more money last year than my girlfriend so could I claim r son to get the earned income credit also we both pay child support on other kids can we claim that as well

    Reply

  38. The Child Tax Credit also includes college students until the age of 19 … Withdrawing money from your 401-K also precludes your from receiving the Saver’s Credit … much of the information presented herein tells only part of the story … In order to receive the most accurately prepared tax return, at least consult with a tax preparer who can complete the picture and the balance of information vis-a-vis important changes for Tax Year 2014.

    Reply

  39. I was in a car accident in 2010. I paid out everything out of pocket over insurance (a lot) and including my travel to doctors. I never settle with insurance as of yet. I never claimed these expenses. Am I able to file an amended return concerning these cost and /or do I wait to settle with insurance? Or, do I not file anything because of this law suit?

    Reply

    • Amended Returns:
      You can always file as many amended returns for three years’ prevoius Tax Years. For 2013 that would include: 2012; 2011 and 2010. Of course you may file the medical expenses irrespective of settling with insurance companies.
      Insurance Settlement:
      If you do intend to settle with insurance companies you may want to first check to see if there is a statute of limitations on filing your claim with insurance, which could be as short as 6 months or as long as a year for most companies.
      Law Suit:
      I really don’t know or understand enough about the lawsuit to be able to adequately advise. You may want to discuss all of this with your attorney, as well.
      Yearly Tax Filing:
      It is a good rule of thumb to be completely compliant with tax filing, meaning that each tax year should be filed irrespective of law suits or other circumstances.

      Reply

  41. Can I claim my girlfriend on my taxes? We lived together all year and I paid all bills. She receives foodstamps and general relief through county. She also owe irs for past years.

    Reply

    • You can claim her as a dependent, signifying her relationship to you as “none.” This does not mean that she is not your girlfirend, in IRS speak it means that you are not blood relations.
      If you paid more than 50% of her support, she can be claimed as a dependent.

      Reply

  42. If I paid for my parents home roof replacement, would I be able to claim it as a deduction or would my parents who own the house? Both of them are retired.

    Reply

    • If your parents had quit claimed the house to you prior to the payment, then yes. It might be a good idea to put the house in a trust for inheritance taxation purposes. Unless the property is a rental property, it is doubtful if the roof replacement is deductible. Typically, energy-saving improvements are deductible.
      If you used an upgraded energy-saving roofing material, it may qualify.

      Reply

  43. I thought my ex was going to claim one of our 2 kids last year and he didn’t. So only one was claimed. Can i claim my 2nd child for last year still, or add it to this years refund ???

    Reply

    • Do both. You are able to re-file for the past three years as many times as you like. That would include 2010; 2011 & 2012 for Tax Year 2013. One tax year cannot be combined with another, so you would file a 1040X for Tax Year 2012 and a regular 1040 for Tax Year 2013. Make sure to see if you qualify for Earned Income Credit (EIC), the additional standard deduction for your child as well as the Additional Child Credit, and credit for any daycare expense for that child.

      Reply
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