Mid-year Tax Strategy: Tips and Tricks

May 26, 2026

You still may be catching your breath from this year’s tax season, but we have a tiny bit of bad news: The longer you wait to shift your attention to next year’s returns, the more you’ll be jeopardizing future savings.

Late spring and early summer is one of the most overlooked — but influential — periods of the calendar for influencing your tax outcome. Enough of the year has passed to see what might be changing with your finances. Meanwhile, there’s plenty of time to make meaningful adjustments to your tax strategy.

Here are a few tips to reduce surprises later on and get a head start on minimizing your tax bill come next April.

Check Your Withholdings

One of the simplest — and most important — mid-year practices is checking to see if your tax withholding still matches your current situation.

Start by asking your employer to review your W-4 form. If your income has changed this year due to a raise, bonus, or job change, you may need to adjust your withholdings. Withholding too little? Even small shifts can result in an unexpected tax bill or hefty penalties. Withholding too much? You might be accidentally shrinking your own paychecks throughout the year.

The IRS observes a safe harbor rule for individuals who pay estimated taxes, which can be an important tool in avoiding penalties. Taxpayers who make estimated payments that add up to at least 90% of their current year’s tax liability or 100% of last year’s tax bill (note: this rises to 110% for higher-income earners) are generally exempt from underpayment penalties.

If your income has increased this year, it may be worth making an additional estimated tax payment before year-end to satisfy the safe harbor rule. And in general, the earlier you incorporate withholdings into your planning, the more control you have over estimated payments and year-end outcomes.

Don’t Overlook Investments

Your taxable investment accounts can also present opportunities for tax efficiency.

One widely used strategy is tax-loss harvesting, which involves selling investments that have declined in value to offset realized gains elsewhere in your portfolio.

Use mid-year planning to assess the directionality of your assets, along with their placement in your portfolio. Are the right assets aligned with the right vehicles? For example, long-term growth assets may be better suited for taxable accounts where capital gains treatment is more favorable. In contrast, interest-generating investments may reap more rewards if housed in tax-advantaged accounts.

With the luxury of time, you can take a look at your investments in collaboration — and then adjust investment decisions accordingly.

Plan for Capital Gains

If you’ve sold investments this year — or know that you’ll consider doing so — now is a good time to estimate your potential capital gains exposure.

Capital gains are generally triggered when investments are sold for a profit, and the timing of those gains can significantly affect your tax outcome. Holding investments for more than a year typically results in more favorable long-term capital gains treatment than investments held for a period of months, whose gains are generally taxed at higher rates.

Reviewing gains mid-year will allow you to:

Ensure you are strategically realizing gains in lower-income years
Offset gains with losses harvested elsewhere
Avoid unintentionally pushing yourself into a higher tax bracket

This is especially important in volatile markets where realized gains (or losses) can accumulate quickly without a clear plan.

Discuss Deductions and Credits

The tax code is constantly shifting. Conversations with an advisor at the mid-year point will help to boost your understanding of what’s new and what you might be missing from your tax preparation.

Now’s the time to get organized around deductions and credits, making sure you are systematically tracking the right expenses and gathering the right documentation. Areas to review with the help of an advisor include:

Charitable contributions
Medical expenses
Education-related costs
Business or self-employment expenses
State and local tax considerations

Even if you ultimately take the standard deduction, reviewing potential itemized deductions can help you decide whether strategies like “bunching” charitable contributions will make sense before year-end.

The earlier you identify these opportunities, the easier it is to plan spending or contributions strategically rather than trying to piece everything together at tax time.

Revisit Retirement Contributions

Use mid-year planning to assess whether you’re taking full advantage of tax-advantaged retirement savings. We all know that contributions to 401(k)s, IRAs, or other workplace plans can reduce your taxable income while simultaneously building long-term savings. But too often people take a set-and-forget approach to their contributions.

It’s a good time to check whether or not you’re maxing out your contributions. And if your cash flow varies throughout the year, you might benefit from increasing contributions during the second half of the year to reduce your overall liability.

Take Control Now

Mid-year tax planning doesn’t need to be complicated — but it does need to be intentional. A short review of your income, withholding, investments, and retirement contributions can help you avoid surprises and take advantage of strategies that disappear once the calendar year closes.

The goal isn’t to overhaul your financial life in spring or summer. It’s to make small, thoughtful adjustments now so that next April feels predictable instead of stressful.

How IMA Private Wealth Helps

IMA Private Wealth helps to simplify your tax-planning needs by being a partner throughout the year. We hold onto the big picture, providing clients with a suite of financial services, including comprehensive tax advice and coordination. We can help you plan for your future with clarity and confidence. Now is not the time to wait.

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