As the leaves begin to change and the crisp fall weather starts to arrive, it’s the perfect time to run through some quick questions to assess your tax situation before the end of the year. Making adjustments now could save you from surprises next tax season.
12 Tax Planning Questions and Discussion Starters
Whether there have been changes in your personal circumstances, or you just need to deal with the evolving tax laws, reviewing your financial standing before December can ensure you’re well-prepared. Below, we’ve outlined 12 common tax planning triggers. Any one is a sure sign that you’ll need to pay a little extra attention to your tax prep work this year.
- Did you owe tax last year?
If you found yourself with a surprise tax bill last year, now is the time to project your current year obligation. A little planning can help you avoid the same scenario and confirm that your withholdings and estimated payments are on track. - Does your household income go over $150,000 (single) or $200,000 (joint)?
As your income grows, so does your tax burden. Higher income can push you into new tax brackets. From there, you might also have other surtaxes triggered, or see your benefits reduced, like the child tax credit. Proactive tax planning can help minimize the impact. - Are you getting married—or divorced?
Marriage comes with its own set of tax rules, and the so-called “marriage penalty” is at an all-time high for certain filers. If you’re tying the knot or going through a divorce, be aware of how your tax situation will shift. Talking with a tax planner can help you determine the best course of action for your asset division and deductions. - Has your kid started college?
Planning for education expenses can open the door to tax credits and deductions. There’s the American Opportunity Credit to consider, as well as 529 savings plans. Reviewing your options can give you peace of mind that you’re taking full advantage of the benefits. - Do you run a small business?
If you own a small business, you likely qualify for a range of deductions. If you’ve launched a new endeavor this year, then you’ll definitely want to set up a tax planning session. - Are you planning to sell investments?
Selling investments at a gain can trigger capital gains taxes. Depending on your income, this can have different impacts. A strategic approach to when and how you sell investments can help minimize your tax liability. - Have you had any changes to your employer-provided benefits?
Employer benefits can influence your taxable income, so if those enrollment options have shifted, it’s probably time for a review. A mid-year review of your health insurance and retirement plans can ensure that any changes are working in your favor. - Are you going to buy or sell a home?
Buying, selling, or even going through a foreclosure comes with important tax implications. Certain deductions are available to homeowners, but only if they’re planned for ahead of time. - Do you have major medical expenses?
Medical expenses can be a challenge to deduct under current tax law. However, certain significant medical bills might allow for itemization. You’ll want to be aware of all the options for any potential deductions. - Did your job situation change this year?
Whether you’re receiving unemployment benefits or started a new job this year, there are specific tax rules that apply. Reviewing your tax situation after a job change can prevent surprises later. - Have you reviewed your withholdings yet?
It’s important to review your withholdings regularly to avoid underpayment penalties. If you’ve had major life changes, a quick review could save you from unexpected tax liabilities. - When was the last time you reviewed your estate plan?
Estate laws change frequently, and even small shifts in the law can impact your long-term planning. A yearly review can keep you and your family informed!
Let’s Make Sure You’re on the Right Track
If any of these situations apply to you, now is the time to act. Schedule a tax planning session with our team at NSO & Company today! We’ll help you navigate these tax triggers and ensure you’re on the right path. The sooner we meet, the faster we can make any necessary adjustments to protect your tax liability this year—and beyond.