NOW IS THE TIME FOR A TAX CHECKUP

A midyear review of your situation can help you avoid a headache next April.

- BY DAVID RODECK

DURING the lazy dog days of summer, taxes are probably the last thing on your mind. But the middle of the year is an ideal time to review your 2024 tax return and look for ways to lower your 2025 taxes before the months fly by.

“A midyear tax checkup can help you avoid unintended surprises later, during the filing season,” says Eliot Bassin, a certified public accountant in Avon, Conn. “We don’t want people hearing information for the first time in April, when a tax bill needs to be paid.”

Here’s a rundown of items to go over now.

Paycheck withholding and estimated taxes. If you received a large refund or owed a substantial amount for 2024, you may need to make a midyear adjustment.

Taxpayers are supposed to pay the IRS and state governments throughout the year rather than all at once, when they file their tax return. If you're an employee who receives a Form W-2, that's usually not a problem, because your employer withholds taxes from your paycheck.

However, if you have non-salary income, such as from self-employment, gig work, investments in a taxable account or withdrawals from a tax-deferred retirement plan, you may need to make estimated payments based on what you expect to owe. The payment deadlines for the 2025 tax year are April 15, June 16 and September 15, 2025, and January 15, 2026.

Ideally, your paycheck withholding or estimated payments will end up close to the amount you'll actually owe. Pay too little and you may fork over late-payment and underpayment penalties. Pay too much and you'll get arefund, which means you're giving the government an interest-free loan.