Here are some circumstances to watch for that can raise your tax liability:

New tax laws

While the goal of the new legislation is to reduce taxes, there are several changes that could cause you to pay more taxes, including:

• Repayment of extra economic stimulus checks.
• New taxability of unemployment benefits.
• Accounting for any small business loan and grant benefits.
• The need to take required minimum distributions once again in 2021.

A child is no longer eligible

Here are some age requirements for popular tax benefits:

• Child and Dependent Care Credit: under age 13
• Child Tax Credit: over age 17
• Earned Income Tax Credit: under age 19 (24 if a qualified student)

Earnings with Social Security benefits

If you are newly retired, start collecting Social Security Benefits, and then begin working part-time, these extra earnings could not only make your Social Security benefits taxable, but it could also result in a reduction of benefits received.

Other life events

While some life events may have positive tax consequences, like a new birth, or becoming the head of household, others might surprise you and result in additional tax.

Capital gains surprises from mutual funds

Often sales of investments are a planned event. Unfortunately, many mutual funds sell assets and then you receive a capital gain statement with a surprise taxable event.