Tips for Tax Season The Quincy Group

Tax season can seem like a pain, but with some forward-looking planning, it becomes far less daunting. Taxes are often our single largest expense, so they’re crucial to consider in your financial planning year-round. Here are some tips to help you prep for tax filing this year and steps to take to minimize your tax burden in years to come.

  1. Get organized as soon as possible (and try to stay that way).

This may seem like a no brainer, but the sooner you get your receipts and information together, the better off you’ll be in April. Make sure you consider home improvements, charitable donations, business expenses, etc.

  1. Are you 72 or older? Don’t forget your Required Minimum Distributions!

First time dealing with RMDs? Depending on when you turn 72, your first withdrawal may be required to be taken by April 1 and December 31 every year after. If you forget, you could be hit with an unnecessary 50% penalty tax.

  1. Be sure to employ tax diversity in your retirement plan.

When it comes to retirement, having accounts that receive varying tax treatment is like playing a stronger card game with the IRS when it’s time to withdraw from your accounts. Aim to not only have money in the traditional taxable investment like your 401(k), but also in savings accounts and after-tax accounts like a Roth IRA that are contributed to after-tax, but growth and principal are withdrawn tax-free! A trusted financial advisor can help you discover how much you should have in each bucket and strategize which account to pull from and when to minimize your overall tax burden.

  1. Understand tax basics and the difference between the terms tax credit, tax deduction, tax deferrals, and tax-free.

A tax credit is a dollar-for-dollar benefit. A tax deduction is worth your highest marginal tax bracket, for instance 28 cents on the dollar. In this instance if you spend $100, you will get $28 back. Tax deferrals are those that you see with accounts like a 401(k) where you pay taxes later. Tax-free means you owe no tax.

  1. Be safe with your online filings.

Online tax filings allow for greater convenience, but also leave us more vulnerable and susceptible to cyber-security threats if we’re not careful. Be sure you’re using a secure browser if you are going to file online and keep your Social Security number safe. You’ll also never receive an email from the IRS, so avoid opening and responding to those cyber-attacks. If you are a victim of tax fraud, always check your credit reports and notify law enforcement as soon as possible.

  1. Have a team of professionals to support you.

Tax laws are confusing and ever-changing. We help you uncover long-term strategies for tax minimization regarding your social security benefits, retirement, investments, and your overall financial plan. Come talk to us about your tax burden and how we may be able to help you.


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Securities and advisory services offered through Royal Alliance Associates, Inc. (RAA), member FINRA/ SIPC. RAA is separately owned and other entities and/or marketing names, products or services referenced here are independent of RAA. RAA is not affiliated with Lone Beacon

Neither the named representative nor the named Broker/Dealer or Investment Advisor gives tax or legal advice.

Fixed index annuities are designed to meet long-term needs for retirement income. Early withdrawals may result in loss of principal and credited interest due to surrender charges. Distributions may be subject to ordinary income tax and, if taken prior to age 59 ½, an additional 10% federal tax. An income rider or benefit (sometimes called Guaranteed Lifetime Withdrawal Benefits, or GLWB) is an additional feature available with some annuities and generally optional and come with additional cost. Income benefits are designed to provide income options above and beyond the standard annuitization or free withdrawal features in annuities. All contract gains beyond the CAP rate are surrendered to the insurance company to pay for the expense of the product.

The views expressed are not necessarily the opinion of Royal Alliance Associates Inc, and should not be construed directly or indirectly, as an offer to buy or sell any securities mentioned herein. Individual circumstances vary. Investing is subject to risks including loss of principal invested. No strategy can assure a profit against loss.