A lot of people only start thinking about their taxes at the end of the year, when it’s time to start hunting down receipts and preparing returns. While there are certain tasks you’ll need to take care of during tax preparation season, a year-round strategy can reduce your tax bill, potentially saving you thousands of dollars. Below are a few steps to take in the middle of the year.

3 Summer Tax Preparation Moves That Will Save You Money

1. Adjust Your Tax Withholding

Getting a refund at the end of the year might seem like a windfall, but it’s just money you’ve already earned. You’d be much better off putting that money into a saving or investment account, where it can earn interest. If you wound up with a large refund this past year, update your W-4 to more accurately reflect how much you should be paying.

2. Calculate Your Estimated Taxes

If you’re self-employed or earn some money on the side, the IRS expects you to pay estimated taxes on a quarterly basis. Compare your income to last year, factor in how much you paid for the first two quarters, and adjust your payments for the rest of the year to avoid big penalties at tax preparation time.

3. Invest in Your Retirement

IRAs and 401(k)s have tax advantages that could lower your liability by thousands of dollars. If you start early in the year, you can maximize the contributions to your retirement accounts and start earning interest.

Tax planning is complex and requires the expertise of a skilled professional who has an in-depth understanding of the code. Lee & Smith, PLLC has been providing high-quality tax preparation services and strategic advice to the Texarkana area for over 30 years. Get more advice about preparing your taxes on Facebook. Call (903) 832-4339 or visit their website to learn more about their services.