Hooray! We all survived another tax season. I hope it wasn’t too bad for you. I know many people had to pay larger than expected tax bills this year. Mostly that was due to people earning a lot of money in 2021…but it also could be a sign of poor planning. Here are a few questions to help you determine the cause of your tax bill:
- Do you know what caused your tax bill to be bigger than expected? If not, look at what numbers changed from the previous year.
- Did your tax status change? Did you resume IRA withdrawals (waived in 2020)? Either could cause a big change in taxes due.
- Is there anything you could have done differently to get a better result? Could you have withdrawn income from another account or avoided capital gains by rebalancing in a tax-smart way?
Depending upon those answers, it could make sense to adjust withholding or at the very least have an awareness of any potential liability needing to be planned for in April of 2023.
If those questions make your head spin, reach out to me. One of our advisors, Conner, is a CPA. He would be happy to do a quick review of your tax situation. It doesn’t take him long to determine if there is room for improvement.
About the Author: John O’Connor
John has more than ten years experience as an Investment Advisor. He focuses on devising and maintaining portfolios that meet individuals’ needs, investment research, and investment strategy. John has been recognized as a “FIVE STAR wealth manager” by Twin Cities Business Magazine 2016-2020.Legal Disclaimer: These posts do not constitute an offer or recommendation to buy or sell any securities or instruments or to participate in any particular investment or trading strategy. They are for informational purposes only. CTW gathers its data from sources it considers reliable. However, CTW makes no express or implied warranties regarding the accuracy of this information or any opinions expressed by the author and may update or change them without prior notification.