Don't Mess With Taxes

Photo by Kay Bell

So how was your summer? Yep, that season officially ended today with the start of Meteorological Fall, which runs from Sept. 1 to Nov. 30.

Wait, you say. It's not sweater weather yet. You're not alone in still feeling the heat.

But maybe things really will be cooler by the time the Autumnal Equinox, the traditional start of Fall, arrives on Sept. 22. This is when Earth's tilt is moving away from its maximum lean toward the Sun.

Who knew weather could get so complicated? Maybe we should just stick with taxes. At least there are some simple moves you can make this September that could help ease your tax life and possibly lower your 2022 liability.

Here are four suggestions.

1. File your extended 2021 tax return. You just couldn't finish up that Form 1040 back in April, so you got a filing extension. Now your new Oct. 17 deadline is just more than six weeks away. But you don't have to wait another six weeks to finish the job. The IRS will gladly take your return as soon as you're through procrastinating. Like today. Or any day in September.

If your adjusted gross income is $73,000 or less, you can still use the IRS' no-cost online Free File option. It's operational through Oct. 17.

2. Make your third 1040-ES payment. Many who've already filed their annual tax return still have other taxes to take care of this month. Yes, I'm talking about estimated taxes, which must be made for income that's not subject to payroll withholding. The third estimated tax payment for the 2022 tax year is due on Thursday, Sept. 15. You can make estimated tax payments electronically or, if you're old-school, use the third Form 1040-ES voucher and snail mail it. Your mailed payment is considered on time as long as the envelope bears a Sept. 15, 2022, U.S. Postal Service postmark. My earlier estimated taxes primer post has the scoop on this extra tax process, payment options, and the payment timetables.

3. Assess your income. The COVID-19 pandemic has eased, at least as far as many are concerned. Its tax effects, however, linger for some. Many folks experienced dramatic employment changes in recent years, from hybrid work options to side gigs to total self-employment to early retirement. If any of those situations apply, it's a good idea to check your taxable cash flow so far this year and take appropriate tax steps, such as paying the estimated tax mentioned in #2 on your gig or other full-time entrepreneurial earnings. Or, if you did decide to leave the working world and start collecting Social Security, look into whether you might owe tax on those governmental retirement benefits.

4. Adjust your payroll withholding. If you're still working for the woman or man, September also is a good time to double check your withholding. Tweaking the tax amount taken out of each paycheck can keep you from owing a big tax bill at filing time next year.

If you find you're underwithholding, the added taxes will be spread over these last four months of the year, so the payday bite shouldn't be too severe. On the other hand, if you're having too much withheld, adjusting your withholding will get you the refigured money now, instead of having to wait (and wait and wait) next filing season for the Internal Revenue Service to send you your refund.

Regardless of whether you need to take out more or less in income taxes each pay period, the IRS' online withholding estimator can help you determine the more accurate amount.

More monthly moves: If the changing of seasons and eventual cooler weather gives you some added tax energy, you can find additional September Tax Moves over in the ol' blog's right column.

That list is, as usual, just beneath the digital clock counting down to the aforementioned October extended filing deadline.

Everyone's tax situation is unique, so how many of these tax moves will apply to you will vary. But check them out just in case.

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