How a Fall Tax Review Can Save You Money and Lower Your Stress

In some ways tax season is like Christmas. Both come at the same time every year and the sooner you start planning the less stressed you’ll be when the big day arrives.

The difference is that while we have warm memories of Christmas past, the tax season is something we’d like to forget about.

However, there are good reasons for thinking about your taxes several months before the end of the year. By doing a quick review now you can help eliminate two of the biggest worries around taxes: collecting all the required information on time, and wondering if you’ll owe the IRS. And even more important, you might save quite a bit of money.

Here are a few things to do.

Maximize Tax-Advantaged Contributions
Richard Lavina, CPA, says that doing a five-minute review of current-year contributions (against their annual limits) in the fall, rather than making assumptions in the spring, is one way to put money back into your pocket.¹ Make sure you’re on track to contribute the fully allowable amount to your 401(k), IRA, HSA, etc.

Take a Look at Your Withholdings
Cynthia Pruemm, writing for Kiplinger, says that if you’ve had (or expect to have) a big life change such as marriage, divorce, birth of a child, or a new job, you’ll likely need to adjust your paycheck withholdings.² One of these events could even put you in a new tax bracket and you need to plan accordingly.

Review Your Deductible Expense Tracking
Itemizing your deductions can potentially save you thousands on taxes. These write offs include things like home office costs, mileage, health insurance (if self-employed), and charitable donations. However, the IRS requires you to document these deductions. Take a few minutes to look at your expense tracking while you still have time to fill in the gaps.

Check in with Your Tax Professional
As we’ve noted, changes in your personal situation can affect your tax status. But you also need to consider changes to the tax laws. Your CPA or tax preparer can tell you about any new rules that could possibly affect you when you file. Finding out now gives you time to make adjustments if needed.

Talk with Your Trusted Advisor
Fall is a good time to review your progress along your financial plan as well as overall financial health. But it’s also a good time to let your advisor know about significant life events you’re anticipating in the coming year. For example, if you’re planning on refinancing your mortgage, changing jobs, or receiving equity compensation, your advisor can help you consider possible tax implications, giving you direction on ways to act prudently.

Reviewing your taxes in the fall gives you enough time to adjust your income streams, withholdings and contributions while you still have time to fix missteps and benefit from any changes.

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