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Tax Return Review Tips

Since tax season is ending and most people have either filed their return or at least have their draft; here are a few suggestions that might be beneficial to complete or discuss with your advisor in order to make the most out of tax season.

Tax Return Review Tips:

1. Check for mistakes:

  • Checking for mistakes is a crucial part of tax time. Even though it might sound monotonous, you want to make sure that you are not only being taxed correctly but receiving any deductions that you and your Thrive advisor planned for. Doing this exercise, will help you be more tax efficient and alleviate any potential headaches down the road, if a correction ends up being warranted (FYI, if a correction is necessary, then Form 1040-X, will need to be filled out). If you are filing by yourself or even if you have a tax professional filing for you; putting another set of eyes on your return could be beneficial. Even though we are not tax professionals, your Thrive advisor, will be happy to look at your return to make sure everything looks in order.

2. Making adjustments:

  • Once you receive your tax return, it would be a great time to sit down and see what adjustments can be made to be more tax efficient going forward in the future. For instance, if you owed money to the government this year, now would be a great time to speak with your Thrive advisor and/or tax professional, to discuss possible tax mitigation strategies that decrease your overall tax burden. Or if on the other hand you received money back from the government, it could be beneficial to discuss dialing back those excess tax payments, that way you are not giving the government an interest free loan every year and your money could be better used elsewhere. There is also other beneficial reasons to review what adjustment might need to be made, to make yourself tax compliant. For example, a lot of savers utilize the Roth IRA, but since this is such a powerful savings vehicle, it is limited to certain income limits (Single - $144,000; MFJ - $214,000). Those savers who have contributed towards a Roth but now make over it’s income threshold, might have to stop contributing or even have to amend past contributions. By reviewing your tax return and seeing what adjustments can be made, will allow you to be more tax efficient going forward in the future.

3. Review your budget:

  • With your tax return in hand, you can see your most recent gross/net income for the year. This is a great piece of information to have because it will allow you to home in on the actual amount you spend each year. This is a crucial factor in financial planning because it allows us to pull the levers of what might need to be done to get you to the lifestyle you want to live. It is all a balancing act, but if you are at a deficit for the year, actions might need to be taken to turn that around and get back on track. And if you are net positive for the year and are saving money in cash, there might be more useful places to be putting that money (i.e., Invest, pay down debt, etc.). By reviewing your budget every year, it will only help make your financial plan more accurate.


As always, if you have any questions, please do not hesitate to reach out to your financial advisor!