| KEY POINTS FOR YOUR CHECKLIST June marks the midpoint of the year, a perfect time for a comprehensive “mid-year tax checkup”. By evaluating your financial and tax situation now, you can make the necessary adjustments to minimize surprises come April. This approach also enables you to benefit from potential tax-saving strategies that might otherwise be overlooked.|
1. Adjust Your Withholdings and Estimated Taxes: Major life events such as a marriage, birth of a child, retirement, or a significant change in income could warrant a need to adjust your tax withholdings. For those who are self-employed or have other non-wage income, remember that your second quarter payment for 2023 estimated taxes is due by June 15th.
2. Retirement Contributions: Review your retirement account contributions to see if you are on track to maximize your contributions for the year. The tax benefits can be significant; in 2023, the contribution limit for 401(k) plans is $22,500, or $30,000, if you’re 50 or older. If you can afford to set aside more towards your retirement, now is a great time to increase your contributions.
3. Investment Review: It’s important to evaluate your investments for tax-efficiency. Adjustments might be required based on gains or losses to optimize your portfolio from a tax perspective.
4. Charitable Contributions and Flex Spending Accounts (FSAs): Keep a record of all charitable contributions you’ve made so far as these can be deducted on your tax return. If you have an FSA, remember that these funds often expire at the end of your plan year. Checking your balance now gives you ample time to schedule necessary medical or dental appointments to use up these funds.
5. Life Events and Major Transactions: Inform your CPA about any major life events or transactions such as a marriage, birth of a child, home purchases, or significant changes in income or investments. Stay proactive about your tax situation to save time, money, and stress down the line. If you need help reviewing your tax situation or planning for the future, don’t hesitate to reach out to us. We’re here to help you navigate these considerations and ensure you’re set for the rest of the year.