Why a Mid-Year Tax Check-In Matters
As summer winds down, many business owners and high-income individuals are focused on vacation plans, Q3 reports, or planning for the fall. But this is also the perfect time for a mid-year tax check-in. By reviewing your financial picture in August, you still have time to implement smart strategies that can significantly reduce your tax burden before the end of the year.
For many of our clients, this check-in is more than just a glance at a balance sheet. It’s a strategic opportunity to align financial behaviors with tax efficiency, profit maximization, and long-term legacy goals.
- Reevaluate Your Estimated Tax Payments
If your income has shifted this year—through business growth, investment gains, or changes in compensation—it’s time to revisit your estimated tax payments. Overpaying means giving the government an interest-free loan. Underpaying could leave you facing penalties in April.
A mid-year analysis helps ensure your quarterly estimates are in sync with your actual income and projections.
- Maximize Retirement Contributions
Now is an ideal time to increase or initiate contributions to retirement accounts like:
- 401(k) and Solo 401(k)
- SEP-IRAs for self-employed business owners
- Defined Benefit Plans for high-income earners
These accounts reduce your taxable income while supporting long-term wealth accumulation. If your business has had a strong year, consider adjusting your retirement contributions upward before Q4 begins.
- Capitalize on Bonus Depreciation and Equipment Deductions
Has your business invested in new equipment, vehicles, or software this year? Under Section 179 and bonus depreciation rules, you may be able to deduct a significant portion of those expenses.
But timing is everything. Some deductions require assets to be placed in service by year-end, not just purchased. Now is the time to review any planned capital investments and ensure you can take full advantage of current tax rules.
- Review Business Structure for Tax Efficiency
Your current business entity type—LLC, S-Corp, Partnership, or C-Corp—might not be the most tax-efficient structure for your current earnings.
A mid-year tax check-in allows your accountant to evaluate whether:
- You could benefit from S-Corp election to reduce self-employment taxes
- A C-Corp structure might shield some retained earnings
- A reorganization could optimize deductions and limit liability
Business evolves. So should your tax strategy.
- Accelerate or Defer Income and Expenses
With half the year behind you, now is a good time to strategically plan timing of income and expenses.
For example:
- If you're in a lower income year, accelerate income to take advantage of a lower tax bracket.
- If you expect a higher income next year, defer income to 2026 and accelerate deductible expenses into 2025.
This strategy is especially useful for clients with variable income, including real estate investors and consultants.
- Use Charitable Giving to Offset Taxable Income
Are you planning any charitable donations before the year ends? Strategize now to maximize your impact and deduction.
Consider:
- Donor-Advised Funds (DAFs): frontload multiple years of donations into one tax year
- Qualified Charitable Distributions (QCDs): for individuals over 70 ½ with IRAs
- Appreciated stock donations: avoid capital gains while still taking a full deduction
Charitable giving isn’t just generous—it’s financially strategic when done right.
- Address Outstanding Payroll or Sales Tax Liabilities
This time of year is a great opportunity to clean up any unpaid tax obligations that might affect your end-of-year cash flow or create audit risks. This includes:
- Late payroll tax payments
- Unfiled state sales tax returns
- Misclassified contractors or employees
Getting ahead of these issues now avoids stress—and penalties—later.
- Conduct a Tax Projection with Us
This is the cornerstone of any mid-year tax check-in. Schedule a meeting with us to:
- Project your 2025 tax liability based on year-to-date income
- Identify new deductions or credits
- Adjust business expenses or payroll strategies
- Review any changes in tax law that could affect you
At James V. Rizzo & Co., we offer concierge tax projections for our clients that help you make smart, informed decisions before the year ends.
- Review Passive Income and Investment Holdings
Whether you own rental property, a passive stake in a partnership, or generate investment income, your portfolio strategy could be creating unexpected tax consequences.
A mid-year review can uncover:
- Unrealized capital gains to harvest
- Opportunity zones or 1031 exchanges
- Excess business losses or passive activity loss limitations
Aligning your tax strategy with your investment goals is essential for wealth growth.
- Plan Now for Year-End Bonuses or Profit Distributions
If you plan to issue employee bonuses, owner draws, or profit-sharing distributions, now is the time to plan it out. Coordinating these payouts with us can:
Waiting until December can limit your options or lead to rushed, inefficient decisions.
Bonus Tip: Don’t Forget State and Local Tax Issues
In multi-state or high-income situations, local tax rules may significantly affect your planning. Mid-year is the perfect time to ensure you are:
- Allocating income correctly across state lines
- Compliant with state nexus laws
- Strategizing around state-specific deductions and credits
Final Thoughts: Strategic Now, Stress-Free Later
A mid-year tax check-in isn’t about scrambling to find deductions—it’s about being intentional. It’s about using the time you still have left in the year to make meaningful decisions that can save thousands of dollars, eliminate stress, and strengthen your financial future.
At James V. Rizzo & Company, we specialize in concierge accounting for high-performing individuals and business owners. Our mid-year tax planning process is designed to bring clarity, control, and confidence to your financial decisions.
Ready to take control of your 2025 tax plan? Schedule your mid-year strategy session with our team today.