August is a jewel of a month in Vermont. While most would argue there isn’t a bad summer month to experience here, August is particularly sweet. It’s also “vacation month,” and there’s no place better to enjoy the lazy days of summer than by Lake Champlain. Another great thing about August? It’s the perfect time to start prepping your taxes.
Did we just burst your bubble?
It’s ok, we understand. The good news is you don’t have to pull together everything right now.
Mid-year tax prep questions
We say “taxes” and clients immediately think piles of paper. We don’t need that right now – we’re just looking for answers to the basic questions below. You may have heard us ask these questions before. They aren’t difficult to answer, but they are essential for us to assess what your 2019 tax return will look like:
- Did you owe money in 2018 or did you get a refund?
- If you received a refund, was the amount what you expected?
- Is your withholding rate on target for 2019?
- If you are self-employed, did you miss any tax payments?
- If you own your own business, what does 2019’s profits look like compared to 2018’s?
- What do the next 5 months look like?
- What investments are you considering for your business in September and October?
This can’t wait? It’s not even Labor Day yet.
Your answers to these questions give us the ability to provide you with an actual, projected number for your 2019 tax return. If the projected number isn’t what you’re expecting, there’s still time this year to change some things.
For instance, if we find your withholding is coming up short, you can submit an updated W-4 to make up for the lack of withholdings and ensure you’re withholding the correct amount moving forward. If you’re taking too much out of your paycheck, we’ll create a new plan for the rest of the year and maximize on your savings.
Here’s the thing: tax planning happens before December 31st. You know once Thanksgiving rolls around, the holiday frenzy will result in this not getting done, or getting done in a rush. Most importantly, if you don’t make tax planning part of your annual routine, you will pay more in taxes than you have to—it’s a given.
Think of this time as a tune-up for your finances. The better prepared you are for the rest of the year, the better shape you’ll be in when December 31st arrives.