Edward Andrew Karpus

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Welcome to the digital home of Edward Andrew Karpus, a distinguished Certified Public Accountant and trusted financial advisor dedicated to excellence in accounting, taxation, and business consulting. This platform highlights Edward’s extensive career, including his leadership roles in both private practice and corporate financial services. With over two decades of expertise, Edward has built a reputation for delivering customized solutions and fostering client success. Beyond his professional achievements, he is committed to empowering individuals and businesses to navigate complex financial landscapes with confidence. Edward Andrew Karpus combines deep industry knowledge with a hands-on approach, driving innovation and inspiring trust in the world of accounting and financial management.

About Edward Andrew Karpus

Edward Andrew Karpus is a seasoned Certified Public Accountant with more than 20 years of expertise in accounting and tax services. Serving as the Manager of Flexible Accounting Services at The Triangle LLC in Raleigh, NC, for the past 12 years and as the owner of Gogebic Tax and Accounting PLLC in Bessemer, MI, Edward provides tailored financial solutions designed to meet the unique needs of his clients.

As a licensed CPA and active member of the Michigan Association of Certified Public Accountants (MICPA) and the American Institute of Certified Public Accountants (AICPA), Edward Andrew Karpus upholds the profession’s highest standards. His extensive experience spans financial analysis, tax preparation, and business consulting, establishing him as a trusted advisor and an accomplished leader who effectively manages teams and operations to ensure exceptional client service.

At Gogebic Tax and Accounting, Edward takes a hands-on approach, combining his dedication to professional growth with innovative strategies that align with evolving industry trends. Beyond his professional pursuits, Edward Andrew Karpus is an avid traveler who enjoys immersing himself in diverse cultures, drawing inspiration, and maintaining a well-rounded perspective that enhances his work. His passion for exploration and commitment to excellence drive his continued success in the dynamic field of accounting and taxation.

Understanding Tax Implications of Major Life Events: A Guide to Navigating Change

Life is full of exciting milestones, from tying the knot to purchasing your dream home. While these events often bring joy and new opportunities, they also come with financial and tax implications that should not be overlooked. Proper understanding and planning can help you maximize benefits and avoid costly surprises. Edward Andrew Karpus takes a detailed look at the tax consequences of some major life events and how you can navigate them.

1. Marriage: Merging Lives and Finances

When you get married, Edward Andrew Karpus explains that your tax situation changes significantly, primarily because of your new filing status. As a married couple, you can choose to file jointly or separately, and each option has its own tax implications.

Filing Jointly vs. Separately

  • Married Filing Jointly (MFJ): Most couples opt for this filing status because it often results in a lower combined tax liability. MFJ allows you to take advantage of higher income thresholds for tax brackets, increased standard deductions, and eligibility for various tax credits, such as the Earned Income Tax Credit and Child Tax Credit.
  • Married Filing Separately (MFS): While less common, this status might be beneficial if one spouse has significant medical expenses, unreimbursed employee business expenses, or other itemized deductions that depend on a percentage of income. However, it generally results in higher taxes and limits access to certain deductions and credits.

Name and Address Changes

If you change your name after marriage, ensure that you notify the Social Security Administration (SSA) so your tax return matches their records. Additionally, update your address with the IRS and the U.S. Postal Service to avoid missing important correspondence.

Joint Assets and Tax Planning

Marriage often leads to combining finances, including investments and property. Ensure you understand how to handle joint accounts, capital gains, and other shared financial assets. Proper planning can minimize tax liabilities and maximize deductions.

2. Buying a Home: A Major Financial Shift

Edward Karpus explains that purchasing a home is one of the most significant financial commitments you can make, and it comes with both immediate and long-term tax considerations.

  • Mortgage Interest Deduction

One of the most valuable tax benefits of homeownership is the ability to deduct mortgage interest on loans up to $750,000 ($375,000 if married filing separately). Edward Andrew Karpus explains that this deduction can significantly reduce your taxable income, especially in the early years of your mortgage when interest payments are highest.

  • Property Tax Deduction

Homeowners can also deduct state and local property taxes up to a combined limit of $10,000 ($5,000 if married filing separately). This deduction is particularly beneficial in states with high property taxes.

  • Points and Closing Costs

If you paid points to secure a lower interest rate on your mortgage, those points may be deductible in the year you purchased your home. Additionally, some closing costs, such as real estate taxes and prepaid interest, may also be deductible.

  • Capital Gains Exclusion

When you sell your home, you may qualify for a capital gains exclusion on the profit from the sale. Single taxpayers can exclude up to $250,000, and married couples filing jointly can exclude up to $500,000, provided they meet certain ownership and use criteria.

3. Having or Adopting a Child: Expanding Your Family

Edward Andrew Karpus explains that adding a child to your family brings immense joy—and new tax benefits.

  • Child Tax Credit

Parents can claim a Child Tax Credit of up to $2,000 per qualifying child under 17. Up to $1,600 of this credit is refundable, meaning you can receive it even if you owe no taxes.

  • Dependent Care Expenses

If you pay for childcare to enable you to work, you may qualify for the Child and Dependent Care Credit. This credit can cover up to 35% of eligible childcare expenses, depending on your income.

  • Adoption Tax Credit

For families who adopt, the Adoption Tax Credit can help offset the costs associated with adoption, including legal fees, adoption agency costs, and travel expenses. For 2024, the maximum credit is $15,960 per child.

4. Divorce: Untangling Financial Ties

Edward Andrew Karpus understands that while divorce can be emotionally challenging, it also comes with complex tax considerations.

  • Alimony Payments

Under current tax law (for divorces finalized after 2018), alimony payments are no longer deductible for the payer, nor are they considered taxable income for the recipient. However, this rule does not apply to agreements made before 2019 unless they were modified.

  • Filing Status

Your filing status for the year of divorce depends on your marital status as of December 31. You may file as single, head of household (if you meet specific criteria), or married filing separately.

  • Asset Division

Dividing assets like retirement accounts, stocks, and real estate can have tax implications. For instance, transferring retirement accounts requires a qualified domestic relations order (QDRO) to avoid early withdrawal penalties.

5. Other Significant Life Events

  • Starting a Business

Launching a business creates opportunities for tax deductions, such as expenses for equipment, office space, and marketing. However, Edward Andrew Karpus explains that diligent record-keeping and understanding of self-employment taxes are also required.

  • Inheritance

Receiving an inheritance may not be taxable at the federal level, but you could face state inheritance taxes or taxes on the income generated by inherited assets.

  • Retirement

Shifting to retirement often involves drawing from accounts like IRAs or 401(k)s, which have their own tax rules. Required Minimum Distributions (RMDs) can significantly impact your taxable income.

Tips for Managing Tax Implications

  1. Consult a CPA: A Certified Public Accountant can provide personalized advice tailored to your situation, helping you navigate complex tax laws.
  2. Plan Ahead: Anticipate how life changes will impact your taxes and adjust your withholdings or estimated payments accordingly.
  3. Stay Organized: Keep detailed records of expenses, deductions, and documentation related to major life events.
  4. Take Advantage of Tax Credits and Deductions: Familiarize yourself with available credits and deductions to maximize your tax savings.

Major life events often bring exciting new chapters but also introduce complex financial and tax considerations. Edward Andrew Karpus emphasizes that by understanding the implications of milestones like marriage, homeownership, and expanding your family, you can make informed decisions and optimize your financial health. Working with a trusted tax professional can help you navigate these changes seamlessly, ensuring you’re prepared for both the challenges and opportunities ahead.

Thank you for visiting the online portfolio of Edward Andrew Karpus, a highly respected Certified Public Accountant and leader in financial strategy and organizational success. With a career spanning over 20 years, Edward Karpus has established a legacy of delivering innovative accounting solutions, empowering businesses, and fostering growth. His expertise in tax planning, financial consulting, and strategic leadership has made a lasting impact on his clients and organizations across various sectors. Beyond his professional accomplishments, Edward Karpus is passionate about mentoring emerging professionals, supporting community-focused initiatives, and promoting financial literacy. His forward-thinking approach combines technical mastery with a dedication to service, enabling individuals and businesses to achieve their goals and create sustainable success.