With the year over halfway complete, many taxpayers are looking to reassess their financial progress. Liz Miller, certified financial planner and founder of Summit Place Financial Advisors, joined TheStreet to offer insights on how to ensure you’re on track for a smooth tax season next April.
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Full Video Transcript Below:
CONWAY GITTENS: Let’s talk about the broader taxpayer in terms of a mid-year financial update, what should all taxpayers be looking at as we are in the middle of the year?
LIZ MILLER: A couple big things we always want to talk about. Let’s start just with your income. You want to take your latest w-2 and you want to look at what has been withheld so far this year and you want to compare it to last year. You want to say, well, well, what were my taxes last year at this point. And am I far ahead, if you work with an accountant, send them that W-2, because what we’re trying to figure out is, am I withholding enough. This is the time of year to make an adjustment to say, whoa, I don’t think I’m keeping enough out of my paycheck and I don’t want to have a big amount I have to pay Uncle Sam next April. So first, look at your W-2 earnings. So far this year compared to last year and how much taxes have been withheld in your state and federal so far this year.
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If you feel like you need more to be taken out, then contact your human resources people, your benefit people, whoever helps you make those changes and ask about how can I get more taxes withheld from my paycheck. So number one is your income. Then with that, maybe you have to pay estimated taxes and you realize that you’re going to have to owe more, that you probably work with an accountant who maybe told you what your estimated taxes are. Send them your W-2 and say, hey, here’s how much we’ve paid. So far in April and June. Am I on track. Should I be paying a little more in September and next January to make sure I’ve paid enough in my tax planning.
Then finally, we’re going to go to our portfolio. And you do want to look at, well, what are my gains been so far this year. If you have individual stocks and they’ve been traded, if you’re working with advisor, ask for an update on what your capital gains are so far this year. If you’re doing it yourself, most of the websites will show you what your realized gains they call it for the year. What have been your realized gains and losses. So far this year. So that again, you can see, am I going to have to pay taxes. So realized gains and losses depending on your income, you’re going to pay anywhere from 15% on that to up to 25% plus depending on your income level.
