As the year progresses, it’s important to start thinking about tax planning to avoid any unpleasant surprises when tax season arrives. There are a number of mid-year tax planning strategies that can help taxpayers save money and increase their retirement fund.
One of the first things to consider is reviewing tax withholdings to ensure that everything is up to date and on track for the coming year. Additionally, increasing 401K contributions is a great way to reduce total adjusted gross income and increase retirement savings. It may also be worth considering Roth IRA conversions, which can take advantage of the current stock market downturn to save on taxes.
Taxpayers can also consider tax-loss harvesting, which involves using losses to offset profits and reduce tax liabilities. By taking these steps, taxpayers can stay organized and be better prepared for the upcoming tax season.