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Would a Mid-year Tax Checkup Benefit You?

If you are inclined to procrastinate until the end of the year or, even worse, until tax-filing season to worry about your taxes, you may be missing out on opportunities to reduce your tax and avoid certain penalties. The following are some events that can affect your tax return; you may need to take steps to mitigate their impact and avoid unpleasant surprises after it is too late to address them.

  • Did you get married, get divorced, or become widowed?
  • Did you change jobs or has your spouse started working?
  • Did you have a substantial increase or decrease in income?
  • Did you have a substantial gain from the sale of stocks or bonds?
  • Are you considering an investment in a Qualified Opportunity Fund to defer tax on capital gains?
  • Did you buy or sell a rental?
  • Did you start, acquire, or sell a business?
  • Did you buy or sell a home?
  • Did you retire this year?
  • Are you on track to withdraw the required amount from your IRA (age 70.5 or older)?
  • Are you taking advantage of the IRA-to-charity transfers (age 70.5 or older)?
  • Did you refinance your home or take out a second home mortgage this year?
  • Were you the beneficiary of an inheritance this year?
  • Did you welcome a new child into your family? Time to consider a tax-advantaged educational savings plan!
  • Are you taking full advantage of retirement savings plans?
  • Have you made any significant equipment purchases for your business?
  • Are you planning to purchase a new business vehicle and dispose of the old one?
  • Are your cash and non-cash charitable contributions adequately documented?
  • If your expenses eligible for itemizing are less than the standard deduction, have you considered bunching charitable contributions so you can itemize this year and then use the standard deduction next year?
  • Did you, or are you planning to, make energy-efficiency improvements to your main home or install a solar system for your main or second home this year?
  • Are you paying college tuition for yourself, your spouse or dependent(s)?
  • Are you keeping up with your estimated tax payments or do they need adjusting?
  • Did you purchase your health insurance through a government insurance marketplace and qualify for an insurance premium subsidy? If your income subsequently increased, you may need to be prepared to repay some portion of the subsidy.
  • Do you have substantial investment income or gains from the sale of investment assets? If so, you may be hit with the 3.8% surtax on net investment income and need to adjust your advance tax payments.
  • Did you make any unplanned withdrawals from an IRA or pension plan?
  • If you are a business owner, do you need to change how the business is organized to take full advantage of the 20% of qualified business income deduction?
  • If you are an employee that incurs job-related expenses that aren’t deductible for years 2018 through 2025, have you arranged with your employer to participate in an accountable reimbursement plan for these expenses?
  • Have you stayed abreast of every new tax law change?

If you anticipate or have already encountered any of the above events or conditions, it may be appropriate to schedule a mid-year tax checkup and consult with this office—preferably before any of the events listed, and definitely before the end of the year.

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