It’s almost June…time to think about mid-year tax planning

Busy season flew by and now we’re almost into June. Crazy how time flies, particularly during the tax season. You may think your tax issues are completely behind you at this point, but the fact is for most people, taxes are a year-round endeavor. If you don’t stay attentive to your tax issues and plan accordingly, you could be in for an unpleasant surprise when it’s time to file. You don’t want to be owing a substantial amount, potentially with underpayment penalties that has to be paid by the following April 15 or you can expect to pay more penalties with interest. The next estimated payment is due on June 15 and if you’re self-employed OR have a substantial amount of non-wage income (dividends, interest, capital gains, etc.), or both, it’s necessary to review your total income and deductions for the year, along with the tax payments you’ve already made so far, and see where things stand. Additionally, if you qualify to make contributions to a deductible Individual Retirement Account (IRA) or can increase your 401k contributions, either of which can reduce your federal tax liability, consider making a contribution at this time as well. Making contributions to these retirment accounts over the course of a year is generally easier than making one lump sum payment, and can spread out the time your retirement investment has to grow. Then be prepared to make the right amount of quarterly federal and state estimated payments, no later than June 15. You’ll thank yourself when filing season comes and don’t have a huge check to write. Need some assistance with this? Contact CAJ Tax Solutions and we can help you out.