It’s Time for Your Mid-Year Tax Review!

5
Jul

It’s Time for Your Mid-Year Tax Review!

Tax season may be long forgotten for some Americans as the tax-filing deadline has come and gone for 2021. Even if you filed on time, a mid-year tax review is a great time to evaluate your current tax situation to help avoid any tax-related surprises next spring.

Now maybe a great time to enact a few changes to improve your tax situation, such as evaluating your qualification for the alternative minimum tax (AMT), increasing your deductions, and avoiding any underpayment penalties.

Are you paying too much or too little in personal income tax? 

The first thing to evaluate is whether the correct amount of taxes is being withheld from your paycheck each month. If you are an employee, the IRS withholding calculator can help you determine whether you need to update Form W-4, the Employee’s Withholding Allowance Certificate to avoid having too much or too little Federal income tax withheld from your pay. Use the results from the calculator to help fill out the form.

Ideas to help offset your income to lower your taxes

  • Examining and updating your W-4 is a great start. There are more ways to save on personal taxes that you may want to consider:
  • Save more into a pre-tax-sheltered retirement savings account.
  • Fully fund or increase your contribution into a flexible spending account (FSA) or health savings account (HSA)
  • Determine if you’re eligible for the earned income tax credit (EITC)
  • Donate money to a charitable cause.

Celebrate Taxpayer Appreciation Day and Tax-Free weekend in August

Taxpayer Appreciation Day and Tax-Free Weekend are both in August. These events remind you to evaluate your tax situation and to shop for things you need while saving money on sales tax. During Tax-Free Weekend, some states cut sales tax on certain items to make back-to-school shopping more affordable. Most large retailers like Walmart, Amazon, & Target will be participating,

Meet with your tax and financial professionals

A mid-year tax review allows you enough time to plan so that you can meet your annual goals or determine if you need to reassess your current tax withholdings. Meet with your tax professional this summer while they may be more available than during the busy tax season. Your financial professional and tax professional can collaborate to ensure you have achieved your ideal tax situation while saving for retirement or once you retire. Retirement is often when taxes on distributions from pre-tax retirement savings accounts hit, making pre-tax planning essential.

SWG1692622-0621b

Disclosures

The sources used to prepare this material are believed to be true, accurate and reliable, but are not guaranteed. This information is provided as general information and is not intended to be specific financial or tax guidance. When you access a link you are leaving our website and assume total responsibility for your use of the website you are linking to. We make no representation as to the completeness or accuracy of information provided on this website. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, websites, information, and programs made available through this website.

In addition, Wendling Financial Group specializes in providing strategies and guidance for those who are seeking a better lifestyle in retirement. If you have retirement savings of five million dollars or $50,000, we can ensure it works as hard. As a result, we offer our experience and knowledge to help you design a custom strategy for financial independence. Contact us today to schedule an introductory meeting!