Here it is August….and what’s on my mind? You got it, taxes! It’s time to evaluate where you are and what you need to do to make next tax season seamless and painless. If you have a tax professional, schedule some time to review your situation, if you don’t have a tax professional get one!
If you are a W-2 employee, check the status of your withholding and insure that you are having enough taken from your check to pay your tax bill, and nothing more. While many people use the IRS as a savings account, it is not a great vehicle for your money, as it earns you nothing additional. You at least earn a minor sum if you just put it into a bank savings account. There are other options you should discuss with your investment adviser that will potentially make more. Changing your withholding is as easy as stopping by payroll and submitting a new W-4.
If you are a business owner, now is the time to reassess your estimated tax payments. Once again, the goal is to neither underpay your taxes (and pay a penalty) or overpay your taxes and get a large refund. Your money serves you much better in your business rather than Uncle Sam’s coffers.
Bottom line, now is a fine time to get organized and prepared so next year goes as well as possible. You can’t guarantee there won’t be any surprises, but you can deal with what you know now and minimize the stress next April!