When your family grows—whether you’re welcoming a new child or getting married—it’s not just your daily life that changes. Your tax situation does, too. New deductions, credits, and filing options can all affect how much you owe or get back at tax time. Here’s an overview of what to keep in mind when life takes a new turn.

When You Have Children

Having a child brings joy, responsibility, and a few new tax considerations. The U.S. tax code offers several benefits designed to help families with children.

Child Tax Credit

The Child Tax Credit (CTC) can significantly reduce your tax bill. For 2024, eligible parents may claim up to $2,000 per qualifying child under age 17, with up to $1,600 potentially refundable. The credit begins to phase out for higher-income households, so it’s important to check your eligibility each year.

Child and Dependent Care Credit

If you pay for childcare so you can work or look for work, you may qualify for the Child and Dependent Care Credit. This credit can cover a percentage of your childcare expenses—up to $3,000 for one child or $6,000 for two or more. Keep receipts and documentation from your childcare provider to claim it.

Dependent Exemptions and Filing Status

While personal exemptions were suspended under recent tax law changes, claiming your child as a dependent still affects your eligibility for credits and deductions. If you’re a single parent, you may also qualify for the more favorable “Head of Household” filing status, which offers a higher standard deduction and lower tax rates.

Education and Savings Benefits

It’s never too early to plan for your child’s education. Contributions to a 529 college savings plan grow tax-free, and withdrawals for qualified education expenses are not taxed. You can also give your child up to the annual gift tax exclusion amount ($18,000 per donor in 2024) without triggering gift tax reporting.

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When You Get Married

Marriage changes more than your relationship status—it can also reshape your tax picture. From filing jointly to sharing deductions, here’s what to consider once you say “I do.”

Filing Status: Joint or Separate?

Most married couples file jointly, which often results in lower overall taxes and access to higher income thresholds for certain credits. However, in some cases—such as when one spouse has significant medical expenses or student loans—filing separately may make sense. Compare both options before filing to see which benefits you most.

Adjusting Withholding and Income Reporting

After marriage, update your Form W-4 with your employer to reflect your new filing status. This helps ensure the right amount of tax is withheld from your paycheck. If both spouses work, you may need to adjust your withholdings to avoid underpayment or a surprise tax bill.

Deductions, Credits, and Shared Assets

Married couples can combine deductions and credits, such as mortgage interest or charitable contributions. If you buy a home together, you can both benefit from the mortgage interest deduction and property tax deductions, subject to IRS limits. Joint ownership can also simplify estate planning and transfer of assets.

Gifts Between Spouses

Transfers of money or property between U.S. citizen spouses are generally tax-free. This means you can move assets between each other without triggering gift tax—an advantage if one spouse has higher income or more assets. If your spouse is not a U.S. citizen, different limits apply, so check the IRS rules before making large transfers.

Don’t Forget to Update Your Information

Whether you’ve had a baby or tied the knot, it’s important to update your personal and financial information with the IRS and your employer. This ensures your tax records and withholdings are accurate.

Be sure to review:

• Your filing status and number of dependents
• Your W-4 withholding allowances
• Eligibility for new credits or deductions
• Any changes in income or childcare expenses

Keeping your information current helps you avoid surprises at tax time and ensures you’re taking full advantage of available benefits.

A New Chapter—Financially and Personally

Major life events like marriage and parenthood bring excitement and change. They also come with new financial responsibilities and opportunities. By understanding how these milestones affect your taxes, you can make informed decisions, maximize your benefits, and keep your family’s finances on track as you begin this new chapter together.