TurboTax / Tax Calculators & Tips / All Tax Guides / General Tax Tips / Summer Tax Tips

Summer Tax Tips

Updated for Tax Year 2016


OVERVIEW

Smart tax planning happens all year round. Here are four things you can do this summer to improve your standing when tax time rolls around again.


Revisit Your W-4 Withholding

Money clip

Most people have far too much tax withheld from their paychecks, as evidenced by the billions of dollars in tax refunds the IRS hands out every year. While over-withholding might give you a nice windfall at tax time, it also means less money in your pocket every payday.

Properly adjusting your W-4 withholding can put more money in your pocket now, without resulting in a huge tax bill by the April deadline. You won't get the large refund you may be accustomed to, but you won't be loaning the IRS your money and waiting until tax time to get it back either.

Your employer can provide you with a new Form W-4 at any time. Keep in mind it may take a few weeks for your new withholding to take effect.

Increase Your 401(k) Contribution

A 401(k) plan allows you to contribute part of your cash wages to a retirement plan on a pretax basis. These deferred wages are not subject to state or IRS tax withholding and are not reported on Form 1040. The result? Your taxable income is effectively lowered by the amount you contribute (within certain limits). You can contribute up to $18,000 for 2016 and, if you are 50 or older, you can stash an extra $6,000 in catch-up contributions for a total of $24,000.

Every dollar you contribute to the plan escapes IRS and state income taxes. If your combined federal and state income tax rate is 30 percent, for example, you save $300 in taxes for every $1,000 you contribute to your 401(k), while saving for the future.

Some employers offer matching contribution, maybe 50 cents on the dollar. If your boss is one of them, make sure you contribute at least as much as needed to capture your employer's match. Otherwise, it's like walking away from free money.

Pay Your 2nd-Quarter Estimated Tax Payment

Avoid end-of-year tax surprises or IRS penalties. If you are self-employed, have side income or have any other second-quarter income that requires you to pay the IRS quarterly estimated taxes, get them postmarked by June 15, 2017. Not sure if you owe? Learn more about estimated taxes.

Carefully Track Your Charitable Donations

Keep better records of the items you donate to charity this year, so you can get the biggest write-off possible at tax time. Noting every item you donate (instead of "one bag of clothing," for example) may seem like a lot of work, but it will pay off at tax time by giving you the biggest IRS tax deduction possible.

TurboTax Deluxe, Premier and Home & Business have ItsDeductible built right in, which gives you accurate valuations for all of the items you donate to charity. You get the biggest tax deduction for your donations and comply with IRS guidelines.

Many users of ItsDeductible discover they've been undervaluing their charitable donations and get a bigger deduction than they expected.

Smart tax planning happens all year round, not just on April 14. A little foresight now can put you in a much better position when tax time comes around again.

Get every deduction you deserve

TurboTax Deluxe searches more than 350 tax deductions and credits so you get your maximum refund, guaranteed.

For only $54.99*
Sign In

Looking for more information?

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.


Security is built into everything we do
Here's how
* Important Offer Details and Disclosures
  • TURBOTAX ONLINE/MOBILE

  • Try for Free/Pay When You File: TurboTax online and mobile pricing is based on your tax situation and varies by product. Absolute Zero $0 federal (1040EZ/1040A) + $0 state offer only available with TurboTax Federal Free Edition; offer may change or end at any time without notice. Actual prices are determined at the time of print or e-file and are subject to change without notice. Savings and price comparisons based on anticipated price increase expected in March. Special discount offers may not be valid for mobile in-app purchases.
  • QuickBooks Self-Employed Offer with TurboTax Self-Employed: File your 2016 TurboTax Self-Employed return between 4/19/17 and 10/16/17 to receive your complimentary subscription to QuickBooks Self-Employed until 10/31/18. Activation by 12/31/17 required. Sign in to QuickBooks Self-Employed via mobile app or at https://selfemployed.intuit.com/turbotax; e-mail address used for activation and sign-in. Offer valid only for new QuickBooks Self-Employed customers. See QuickBooks.com for price comparison.
    • When you use TurboTax Self-Employed to file your 2017 taxes, you will have the option to renew your QuickBooks Self-Employed subscription. If you do not purchase TurboTax Self-Employed by 10/15/18, you will have the option of renewing your QuickBooks Self-Employed subscription by 10/31/18 for another year at the then-current annual subscription rate. You may cancel your subscription at any time from within the QuickBooks Self-Employed billing section.
  • Pays for itself (TurboTax Self-Employed): Estimates based on deductible business expenses calculated at the self-employment tax income rate (15%) for tax year 2016. Actual results will vary based on your tax situation.
  • Anytime, anywhere: Internet access required; standard message and data rates apply to download and use mobile app.
  • Fastest refund possible: Fastest tax refund with e-file and direct deposit; tax refund time frames will vary.
  • Pay for TurboTax out of your federal refund: $X.XX Refund Processing Service fee applies to this payment method. Prices are subject to change without notice.
  • TurboTax Expert Help, Tax Advice and SmartLook: Included with Deluxe, Premier and Self-Employed (via phone or on-screen); not included with Federal Free Edition (but available for purchase with the Plus bundle). SmartLook on-screen help is available on a PC, laptop or the TurboTax mobile app. TurboTax experts provide general advice, customer service and product help; tax advice provided only by credentialed CPAs, enrolled agents and tax attorneys. Feature availability varies by device. State tax advice is free. Service, area of expertise, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice.
  • Tax Return Access, My Docs and My Analysis & Advice features: Access to all tax-related documents we have on file for you is available until you file your 2017 tax return or through 10/31/2018, whichever comes first. Terms and conditions may vary and are subject to change without notice.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2015 TurboTax products.
  • Most Popular: TurboTax Deluxe is our most popular product among TurboTax Online users with more complex tax situations.
  • CompleteCheck: Covered under the TurboTax accurate calculations and maximum refund guarantees.
  • #1 rated online tax prep provider: Based on independent comparison of the best online tax software by TopTenReviews.com March 13, 2017.
  • TURBOTAX CD/DOWNLOAD SOFTWARE

  • TurboTax CD/Download products: Price includes tax preparation and printing of federal tax returns and free federal e-file of up to 5 federal tax returns. Additional fees apply for e-filing state returns. E-file fees do not apply to New York state returns. Savings and price comparison based on anticipated price increase expected in March. Prices subject to change without notice.
  • Fastest refund possible: Fastest tax refund with e-file and direct deposit; tax refund time frames will vary.
  • Pay for TurboTax out of your federal refund: $X.XX Refund Processing Service fee applies to this payment method. Prices are subject to change without notice. This benefit is available with TurboTax Federal products except TurboTax Business.
  • About our TurboTax Product Experts: Customer service and product support vary by time of year.
  • About our credentialed tax experts: Live tax advice via phone is included with Premier and Home & Business; fees apply for Basic and Deluxe customers. State tax advice is free. Service, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice. Not available for TurboTax Business customers.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2016 TurboTax products.
  • Data Import: Imports financial data from participating companies; may require a free Intuit online account. Quicken and QuickBooks import not available with TurboTax installed on a Mac. Imports from Quicken (2016 and higher) and QuickBooks Desktop (2012 and higher); both Windows only. Quicken import not available for TurboTax Business. Quicken products provided by Quicken Inc., Quicken import subject to change.