1. Check Your Withholdings & Estimated Payments

W-4 Review: If you’re a W-2 earner, use the IRS Tax Withholding Estimator to ensure the right amount of tax is being pulled from your paycheck. This prevents underpayment penalties or a massive, unexpected tax bill

Quarterly Estimates: If you are self-employed or have unearned income (investments, 1099 contracts), calculate if your Q1 and Q2 estimated tax payments match your current year-to-date income to avoid penalties

How to check Witholdings Why should you pay estimated taxes?

2. Optimize Retirement & Health Savings

Boost Contributions: Mid-year is the perfect time to review your payroll deductions to traditional workplace plans (e.g., 401(k), 403(b)) to see if you can increase your pre-tax contributions for the remainder of the year.

FSA Check-in: Check your Flexible Spending Account (FSA) balance. Plan out eligible healthcare expenses to ensure you don’t lose any “use-it-or-lose-it” funds before the deadline.

3. Manage Capital Gains and Losses

Harvest Losses: Review your taxable investment accounts. If you have “losers” (assets trading at a loss), consider selling them to offset any capital gains you have realized this year, or to offset up to $3,000 of ordinary income.

4. Strategize Deductions

Bunching & Itemizing: Determine whether you will take the standard deduction or itemize. If your deductions are close to the standard deduction threshold, consider “bunching” charitable contributions or accelerating elective medical procedures into this year to push your total itemizable expenses over the limit.

Child Care Tracking: If you use summer day camps or childcare, gather these statements and tax ID numbers, as they could qualify for the Child and Dependent Care Credit.

5. Leverage Business & Self-Employment Perks

Entity Check-in: Evaluate if your current business structure (LLC, S-Corp) is still optimal for your profitability, and track your Qualified Business Income (QBI) deduction implications.

Accelerate Equipment Purchases: For business owners, review capital purchases to confirm they are properly classified for bonus depreciation.