Mid-Year Tax Reviews Can Save You $$$

Every tax season, U.S. businesses owners and individual taxpayers undergo an amazing ritual. At the beginning of the year, we start collecting forms from various entities: banks, creditors, investment companies, our employers, etc.

After we have gotten all of our paperwork, we then figure out whether we’re going to waste a weekend slogging through all this paperwork, or if we’re going to outsource it to someone like a strip mall tax preparer or a CPA. Whatever we decide, our singular focus is to figure out one thing: “How big is my refund going to be?” 

If the answer is negative, meaning we owe the IRS money, that ruins the whole weekend. Whatever the result, all we know is that once we have finished—which is usually around March 15th for businesses and April 14 for most individuals— we don’t think about taxes for another year. 

Is that the right approach? Perhaps not.Here are 5 reasons why you might want to review your tax situation mid-year.

Tax Review Reason #1: Adjusting employer withholdings.

In early 2018, the IRS prescribed new withholdingtables for employers, based upon the changes in the Tax Cuts and Jobs Act of 2017. While most people will pay a lower tax bill, there are those who might pay more. However, the withholding tables are largely adjusted to withhold less in taxes which can result in a nasty double whammy for some taxpayers of paying more in taxes, but having less withholdings in their paycheck. 

You can avoid this situation by simply taking 10 minutes to check for yourself on the IRS’ withholding website. Here, you can walk through some pretty simple questions about your personal situation, income, and possible deductions. After answering these questions, the IRS will give you some suggestions on whether you need to adjust your employer withholdings. 

Tax Review Reason #2: Seeing the tax impact of specific life events.

life changing event.jpg

Sometimes, it seems that our taxes just stay the same, regardless of what we do. That is not necessarily true. Here are a few examples of specific life events that should encourage you to do a mid-year tax review.

  • If you have a child going to college, you may qualify you for a tax credit and deductions for tuition expenses. Check out the IRS Website for details.
  • If you have purchased a home for the first time and are starting to itemize deductions because of the mortgage interest and real estate taxes you are now paying.
  • If you have installed energy-efficient appliances that provide you eligibility for tax credits. Click here for more information.
  • If you are recently retired and need to figure out how your withholdings work now that your employer is no longer taking that money out of your paycheck.

Tax Review Reason #3: Sound tax advice.

If you ask a tax professional questions about your financial situation at this time of year, you are consulting them when they are not singularly focused and stressed over getting through tax season. 

You can have an enlightened conversation about this year’s tax return with the knowledge base of last year’s returns and the calm of an off-season consultation. 

Tax Review Reason #4: Learn more about your options and properly plan

Sound tax advice.jpg
  • Planning to sell some stock? Depending on your situation, there’s probably more than one right way to do this. There are also there are many tax-inefficient ways. Talking with a financial professional before you make these decisions might help you save money on taxes.
  • Looking to increase your charitable contributions this year? Perhaps you can get more bang for your buck if you bunch itemized deductions every other year.
  • Just retired, but not ready to take money out of your IRA? Perhaps it is worth doing Roth conversions while you’re in a low tax bracket, so you won’t get a nasty surprise when you have to start taking required minimum distributions and find out you’re in a much higher tax bracket. Proper tax planning might help you figure out the best decisions for your situation.

There are so many different aspects of your life with some sort of tax impact. And it’s important to make sure you’re doing this while you still have time to make changes. For example:

  • If you need to adjust your withholdings, it’s best to do it mid-year, so you have more paychecks for those changes to take effect. **
  • If you’re looking to contribute to an IRA**, it’s probably best to spread out those contributions over the course of the year. When you do tax planning mid-year, you can always come back at year-end to see what else needs to be done, but the reverse isn’t necessarily true.

The point should be to enjoy your BEST life while remaining as tax efficient as possible. And that’s best done with proper tax planning. 


What’s next? Talk to your financial advisor. That’s us!! Note Advisors is a one-stop-shop for all of your tax review and planning needs. 

In fact, GCW Principal, Shawn Glogowski, is an Enrolled IRS Agent, which means he is licensed to practice before the IRS and, if needed, can legally advocate with them on your behalf. 

Why not get your mid-year tax review going now, before it’s too late.


Parts of this blog were excerpted from an online article by WestChase Financial Planning.

Leave a Reply

Your email address will not be published. Required fields are marked *