7 Potential Reasons to Go Through a Mid-Year Tax Checkup

Who is Ready for a Tax Checkup?

Taxes can be confusing, but fortunately there our advisers out there ready to help!

Taxes can be confusing, but fortunately there our advisers out there ready to help!

Written by: Bill Cardwell, CFP® 08/09/2016

It is that time of year, once again summer has flown by, and kids are returning to school.  That also means it is time to take a closer look at your what your tax situation make look like for 2016. To be quite honest, most of us aren't having ridiculously exciting conversations about taxes while sitting around the water cooler.  However, we still have the ability to significantly improve your financial plan by correctly paying your fair share of taxes throughout the year.

"While creating a 'tax analysis' sounds like a painful and somewhat tedious process, it is actually something that we can figure out in my office after a short conversation."

There are a number of reasons why this could be important for you and your current situation.  The reality is, now is the perfect time to assess your current tax projections, and to help prevent a huge surprise next April.

1. You own a business

Depending on the business structure, a small business owner’s income can vary widely.  If you own your own business, you may also have access to additional deductions and credits. If you are making contributions based on last year’s income, it may be time for a mid-year checkup.

2. You got married (or divorced) in 2016

There are different tax rates for single and married taxpayers. Unless you have changed your withholdings you may have an amount being withheld from each paycheck that doesn’t fit your current tax status.

3. You had a child in the last 12 months

Let’s be honest, kids are great. As I’m typing this my one year old, Gavyn, is chucking half-eaten chicken nuggets at me across the dinner table… I keep telling myself that one day all of this practice throwing things might lead to a future college scholarship, but until then my wife and I do get to claim him as an exemption on my personal tax return. If you have had a child in the last 12 months, your tax picture may need reviewed.

4. You changed jobs in 2016 (or halfway through 2015)

Especially if your income changed, career changes have an impact on your income tax withholdings and may have thrown your tax refund off center.  You also may have filled out form W-4 differently than your previous job, which can lead to a withholding that is significantly different than what is appropriate for you.

5. You Owed on Your Federal or State Taxes in 2015

Were you forced to write a check to the IRS last year?  If so, what steps did you take in order to not repeat that same result this year?  Checking into your current tax projection for 2016 can reduce the headache of owing a big check to the IRS again this year

6. Your company is based outside of your home state

Many states do not have local income taxes, this causes many out-of-state employees to not have enough withheld for tax purposes.  If you work for a larger company, this additional withholding sometimes falls through the cracks and you end up owing more than you had originally planned.

7. You had education expenses, or a child that went to college

If you fall under certain income limits, most qualified education after high school comes with tax preferential treatment (both credits and deductions are potentially available depending on the type of education)

What are your next steps?

My company, Aurora Financial Strategies, can provide a tax analysis for your situation free of charge.  If you are interested in hearing more, feel free to give me a call in order to set up a time to check your current tax picture.  My phone number is (765)438-4682, or I can be reached at billy@billycardwell.com

Bill Cardwell CFP®


Bill Cardwell is the founder and President of Aurora Financial Strategies, a financial advisor practice based out of Kokomo, Indiana.  He can be reached at billy@billycardwell.com or by calling (765)438-4682.  Advisory Services are offered through Creative Financial Designs, Inc., A Registered Investment Advisor, and Securities are offered through cfd Investments, Inc, a Registered Broker/Dealer, Member FINRA & SIPC.  Aurora Financial Strategies is not Owned or Operated by the CFD companies