While many individuals think about taxes only during filing season, the reality is that proactive tax planning throughout the year can significantly impact your finances. Let’s review some key strategies to consider now that your taxes are filed.

Take a moment to review your withholding allowances and adjust them if necessary. Life changes such as marriage, having children, or purchasing a home can impact your tax situation, so it’s essential to ensure that your withholding aligns with your current circumstances.

If you’re self-employed or receive income that isn’t subject to withholding such as capital gains or rental income, remember to plan for quarterly estimated tax payments. Failure to do so can result in underpayment penalties, so staying on top of these payments is crucial.

Review your contributions to tax-advantaged retirement accounts such as IRAs, Roths, 401(k)s, or HSAs. The maximum limits may have increased so adjustments could be necessary to take full advantage of these plans.  Not only do these contributions help you save consistently, but they provide tax advantages today and in the future.

Charitable contributions can provide tax benefits, so evaluate your giving strategy for the year. Donating appreciated assets such as stocks or mutual funds can allow you to avoid capital gains taxes while still supporting causes you care about.

Reach out to your Eagle Ridge advisor if you’d like to get started on a financial plan that accounts for your individual tax needs.