Filing your taxes can feel like crossing the finish line after a marathon race. Still, tax season never really ends. If you’re like many Brighton, MI, taxpayers, you may be feeling a mix of relief with frustration—relief that it’s over with, frustration with a surprise bill, or a smaller-than-expected refund. That’s where proactive planning can make a difference.
Smart tax planning doesn’t start in April; it begins with this year’s return. By making a few minor alterations now, you can lower your level of stress next year and hold on to more of your money. As Brighton financial planners, we at Main Financial Group Wealth Management have years of experience helping both families and individuals safeguard their financial futures. If you want to lower liabilities, boost your deductions, or create a more efficient tax strategy, doing something now can make a tangible impact come next tax season. These five important steps will make your next tax season more efficient.
Step 1: Review Your Recent Tax Return
Don’t file your tax papers without spending a few minutes reviewing them. Were you missing some credits or deductions? Did something in your life—such as a job change, home purchase, or new dependent—have some impact on your taxes? Understanding what happened to your money and your tax rate can help you plan for changes.
Among the best ways to make your Brighton, MI, financial planning more effective is to find areas where you might have overpaid. Whether you can simplify your deductions, realign your investments, or plan your purchases, a detailed review of your return provides a basis for a more efficient tax outcome next year.
Step 2: Adjust Your Withholding (as Needed)
Your W-4 form determines what’s withheld in taxes with each paycheck. If it’s not adjusted correctly, you could be giving the IRS an interest-free loan—or facing a surprise bill at tax time. Significant life events like marriage or a new baby can also change your tax situation.
Take a few minutes to check your withholding using the IRS online calculator or with a financial advisor in Brighton, MI. Adjusting your W-4 now keeps you on track for next year. Small adjustments can make a big impact in managing your cash flow and avoiding April surprise shocks.
Step 3: Explore Tax-Favored Accounts
Among the best strategies to reduce taxable income is through contributing to tax-advantaged accounts like 401(k)s, IRAs, and HSAs. Such accounts allow you to save for healthcare expenses or retirement while receiving a tax deduction.
If you’re looking to retire in Brighton, MI now is a good time to review your contribution rates. Increasing your retirement savings not only helps assure your future but can also put you in a lower tax bracket. Michigan residents can benefit from special state-level incentives on such accounts, making those accounts even more attractive. Fully utilizing such contributions now can mean significant tax savings down the line, especially if accompanied by a carefully planned withdrawal strategy in retirement.
Step 4: Check and Renew Your Insurance Coverage
Most people are not aware that some insurance premiums, including self-employed health insurance and long-term care insurance premiums, may be deductible. It is essential to check your policies annually to ensure you are both well covered and receiving optimal tax savings.
Other than taxation issues, proper life, home, and auto insurance are basic components of risk management. As Brighton, MI, financial planners, we help you examine their coverage to ensure that you’re protected while making smart financial decisions. A good insurance plan does more than give you peace of mind—it’s a critical component that will save you money in both the short and long term.
Step 5: Consult with a Financial Advisor in Brighton, MI
Tax planning and financial planning can be complex, and that’s why professional guidance is important. A financial advisor can help you integrate tax-effective investment planning, retirement planning, and risk management into your overall financial plan.
As a Brighton, MI, financial planning firm that works with families and individuals like you, Main Financial Group works with you to design customized tax planning strategies that suit your goals. Whether you’re simplifying your retirement plan, coordinating your deductions, or navigating compliance with current tax law, we can help you. Smart financial decision-making today can translate to long-term wealth preservation and stress-free tax time tomorrow.
We’re Here to Help
Tax season does not have to be stressful each year. By being proactive today—reviewing your return, adjusting withholding, maximizing tax-favored accounts, reviewing insurance coverage, and getting advice from a trusted financial advisor—you can have peace of mind in your financial situation. We at Main Financial Group are committed to helping Brighton residents take control of their economic well-being. Would you like to start planning your next year’s taxes? Contact us today to create a plan that is perfect for you!