What Your Tax Return Can Tell You If You Know Where to Look

Most folks have filed their taxes by now. If you’re a business owner, though, you know the truth tax season doesn’t really end. It just changes shape. And if you filed an extension, October will be here before you know it.

This time of year is perfect for taking a breath and circling back to the return you just filed. Before it gets dusty in the drawer or buried under digital clutter, take another look. There’s a lot of valuable insight buried in those numbers if you take the time to really understand them.

Your Return Is More Than a Receipt

Too many people treat their tax return like it’s just proof that they filed. But if you flip through the pages, line by line, it tells a story about what changed, what stayed the same, and where things might be heading.

Here’s what I always recommend:

• Compare last year’s return to this year’s. Did your income jump? Did interest income rise along with rates? Did your tax bill go up if so, why?
• Look at your IRA distributions. How did they impact your overall tax bill? And if you’re already on Social Security, did those distributions tip you into having more of that income taxed?
• Watch the brackets. You might be closer than you think to bumping into the next tax bracket, or hitting the threshold where Social Security gets taxed. Know where you stand.

It’s also a good time to run some rough numbers on Roth conversions. How much room do you have to convert before triggering more tax? Or before sending more of your Social Security into the taxable column? These little details matter. A lot.

IRA vs. Roth: Don’t Just Think About Today’s Tax Bill

If you’re still working and putting money away for retirement, it’s worth taking a moment to re-evaluate your choices. The Roth vs. Traditional conversation isn’t just about what saves you money this year it’s about flexibility later.

Too many people head into retirement with one big tax-deferred nest egg. It might look good on paper, but when you start pulling money out, you’ll quickly realize how little control you have over the taxes. Everything is taxable. Your Medicare premiums might go up. Your Social Security gets taxed. The dominoes fall fast.

What you want is a mix:

• Some tax-free money (Roth IRA, Roth 401(k))
• Some taxable investments
• Some traditional, pre-tax retirement savings

That mix gives you the power to choose where your income comes from. That’s real flexibility and it can save you thousands over the course of retirement.

The Market’s Jumping. That’s Not a Bad Thing

If the recent market swings have made you a little nervous, you’re not alone. But here’s what I’ve been telling folks: This correction has been a long time coming.

I’ve said it before overvalued stocks eventually come back down to earth. That’s not a failure of the system. It’s the system working like it’s supposed to. These dips help bring overpriced assets back in line, clear out the folks who maybe shouldn’t be in the market, and set the stage for the next run.

Right now, I’m looking for:

• An S&P 500 drop below 5000
• A few rebounds into the mid-to-high 5000s
• Then back down, testing into the 4000s

That kind of bottoming-out process is healthy. It may take time months, even but it’s what builds the base for the next stretch of market growth.

Here’s the key: Before you invest a single dollar, know how much volatility you can stomach. If the past few months have kept you up at night, that’s your gut telling you something. Listen to it.

Don’t Get Distracted by the Noise

Lately, news cycles have been throwing gasoline on every little move in the markets. Trade negotiations, political stories, headlines meant to provoke. Try not to get caught up in it.

None of that is real until a deal is actually done. What matters most is your long-term plan. Stay focused on what you can control. The market has always had its ups and downs. This is no different.

One Last Thing…

For those who don’t already know, I offer discounted tax prep for all clients with investment accounts under management. First-time prospective clients can also use the offer one year at that rate, and if we end up working together long-term, it continues.

It’s a simple way to take care of a necessary task without making a big production out of it. And my clients who use the program? They love it.

Keep the Long Game in Mind

Your financial picture doesn’t live in a vacuum. Everything taxes, investments, retirement income it all plays together. The better you understand those moving parts, the better your decisions will be. So take some time this month. Revisit your return. Review your accounts. Think ahead.