Reminder for Employees: It’s time for a tax checkup to help stay on track
August 26, 2022
As summer continues and fall approaches, it may be tempting to get distracted by vacations, concerts, barbecues and camping. However, financial experts say this is also the perfect opportunity for a midyear tax progress report.
A tax checkup shows if you’re on track and may uncover ways to save over the remaining months. Each year brings new things so being aware and monitoring can make a huge difference when it comes to tax time.
Here are some items you may want to include in a midyear tax audit:
As time passes, life changes may affect how much someone needs to withhold every pay period.
The IRS tax withholding estimator allows filers to double-check the levies taken from their paychecks, cutting the risk of underpaying or overpaying taxes throughout the year.
Those receiving unemployment income could also benefit from a midyear audit. Although the default federal tax withholding is 10%, recipients may set aside more with quarterly estimated payments or deductions from a future job.
The middle of the year is a great time to review retirement plan contributions, such as 401(k) and even your individual retirement accounts.
While filers have until the tax deadline next year for IRA or health savings account contributions, they won’t have the same opportunity for their 401(k) after the year ends.