Tax planning rarely tops anyone’s summer to-do list. But while most taxpayers wait until December or April to think about their taxes, those who act at mid-year gain a real strategic advantage. With six months of actual financial data in hand and six months left to make adjustments, now is the ideal time to assess where you stand and implement strategies that could save you thousands.

The difference between proactive planning and reactive preparation is significant. Waiting until year-end leaves you scrambling with limited options. Acting now gives you time to adjust withholding, fine-tune estimated payments, and avoid the unpleasant surprise of an unexpected tax bill next spring.

Get Organized

Good record-keeping is the foundation of effective tax planning. Gather receipts, investment statements, and charitable contribution records from the first half of the year and fill any documentation gaps now. If you have moved since your last filing, notify the IRS of your address change. A legal name change should be reported to the Social Security Administration. Setting up or logging into your IRS online account is also worthwhile to view your federal tax records, make payments, and manage key preferences.

Check Your Withholding

Your paycheck is likely your largest income source, making it the most important element to review. Many taxpayers set their withholding when they start a job and never revisit it, even as life changes dramatically. Marriage, divorce, the birth of a child, a home purchase, or a shift in income can all affect your tax liability. Use the IRS Tax Withholding Estimator to see whether your current withholding aligns with your projected tax bill. If a change is needed, submitting a new Form W-4 to your employer now maximizes its impact over the remaining pay periods.

Account for All Income Sources

Wages are the obvious starting point, but the tax code requires reporting on nearly all income. Gig work, investment gains, rental income, retirement distributions, gambling winnings, and even forgiven debt can all create tax liability. If you receive substantial income that is not subject to withholding, such as self-employment income, dividends, or pension payments, you are likely responsible for making quarterly estimated tax payments. Mid-year is a good time to confirm your first two payments were adequate and adjust your third and fourth quarter amounts accordingly. Underpayment penalties can be significant, so getting this right matters.

Maximize Retirement Contributions

Contributions to 401(k)s, IRAs, and similar accounts serve a dual purpose: building long-term wealth while reducing your current taxable income. Review your year-to-date contributions and calculate how much you need to save from each remaining paycheck to reach the annual maximum. If your employer offers matching contributions, confirm your contribution pattern allows you to capture the full match. Self-employed individuals should project their full-year income now and plan contributions to SEP-IRAs or Solo 401(k)s accordingly—these accounts can offer substantially higher contribution limits.

Review Your Investment Portfolio

Mid-year is an ideal time to assess whether your taxable investment accounts are working as hard as possible from a tax perspective. If you are holding positions with unrealized losses, selling them to offset capital gains elsewhere in your portfolio, a strategy known as tax loss harvesting, can meaningfully reduce your tax bill. Conversely, if you have significant unrealized gains, it is worth modeling whether realizing them this year or next produces a better outcome based on your projected income.

Review Marketplace Health Insurance

If you purchase coverage through the Health Insurance Marketplace, changes in income or household circumstances can affect your Premium Tax Credit. When you file your return, the IRS reconciles the advance credit you received against what you were actually entitled to based on your real income. If your income has risen, you could owe a repayment. If it has fallen, you may be leaving money on the table each month. Report changes such as marriage, divorce, a new child, a move, or a shift in income to your Marketplace promptly.

Use Your FSA Funds

Flexible Spending Arrangements allow you to use pre-tax dollars for qualifying medical and dependent care expenses, but most FSAs operate on a use-it-or-lose-it basis. Check your balance now and compare it against anticipated expenses for the rest of the year. Scheduling overdue medical, dental, or vision appointments and purchasing qualifying supplies are practical ways to put those funds to work before they expire.

Consider Estate and Gift Tax Planning

The annual gift tax exclusion allows you to give a set amount per recipient each year without triggering gift tax or reducing your lifetime exemption. Mid-year is a good time to review how much you have gifted so far and whether additional gifts make sense before December 31. For those engaged in more comprehensive wealth transfer planning, such as funding trusts, making charitable gifts, or transitioning a family business, acting well before year-end gives your advisors the time needed to structure these transactions properly.

How Hannis T. Bourgeois Can Help

Our team at HTB Wealth Advisors also helps clients evaluate tax-efficient investment strategies, retirement planning opportunities, and estate and gift planning decisions designed to support long-term financial goals. By taking a coordinated approach to both tax and wealth planning, clients can make more informed decisions before year-end deadlines become more urgent.

The cost of waiting is real. The benefit of acting now compounds over the months ahead. Contact us today to schedule a mid-year tax planning consultation and take control of your tax situation before year-end.