Your 2022 Go-To Tax Moves

>> News Listing

Apr 01, 2022

Here are several time-tested tax planning strategies to help you this year.

  • tax planning.pngCheck your withholding. Confirm you have the right amount withheld from your paycheck for the balance of the year. It is especially important to review if you recently had a change in income, or you have experienced a big life event, like a new child or a home purchase. This exercise will help you to avoid paying underpayment penalties or inadvertently providing an interest-free loan of your money to the IRS. You can check your withholding using the IRS Withholding Tool. If you need to change your withholding, complete a new Form W-4 and submit it to your employer as soon as you can. (Both the withholding tool and the form can be found on the IRS website.)
  • Forecast your income and profit. If you own a business or receive income from investments, consider conducting an income and profit forecast once a quarter so you can meet your estimated tax payment obligations. You can also use your forecast to budget how much you will need to save each month, so you will not have a huge tax balance to scramble to pay at the end of the year.
  • Prioritize retirement and savings plans. Take time to review your 401(k), individual retirement account (IRA), health savings account (HSA) and other savings accounts to ensure you are maximizing your tax savings. Establish a regular contribution schedule early in the year, while considering new maximum contribution limits. And if you are working, take full advantage of your employer's retirement contribution matching program.
  • Conduct an investment strategy review. If you have not already done so, now is the time to conduct a review of your investment portfolio. This will help you create a tax-efficient strategy that allows you to allocate assets to accounts where tax savings can be maximized. For example, you may want to re-balance your investments to align to your retirement plan risk goals.

Finally, part of minimizing your tax bite this year should also include sitting down to conduct a robust tax planning session. Tax laws continually change, and you can almost always adjust to take full advantage of these changes.

Please feel free to reach out to the accountants and investment advisor representatives at Terry Lockridge & Dunn and World Trend Financial to discuss your specific circumstances and goals. They can be reached in Cedar Rapids at 319-364-2945, or in Iowa City at 319-339-4884.

Tags: Tax Planning