{"id":1336,"date":"2026-05-22T14:07:04","date_gmt":"2026-05-22T14:07:04","guid":{"rendered":"https:\/\/denvermovingchronicle.com\/?p=1336"},"modified":"2026-05-22T14:07:04","modified_gmt":"2026-05-22T14:07:04","slug":"six-tax-tips-you-should-start-thinking-about-now","status":"publish","type":"post","link":"https:\/\/denvermovingchronicle.com\/?p=1336","title":{"rendered":"Six tax tips you should start thinking about now"},"content":{"rendered":"
\n

Here are six common ways taxpayers get off track and the questions they should ask themselves during the tax year.<\/p>\n

Don\u2019t assume the answer is the same as last year<\/p>\n

Taxpayers often default to \u201csame as last year\u201d thinking. But tax outcomes depend on variables that shift constantly, like income, markets, tax laws, interest rates, and personal circumstances.<\/p>\n

<\/div>\n

Consider these examples:<\/strong><\/p>\n

    \n
  1. Home office deduction: The calculation method can vary. One approach is based on square footage, but allocating based on number of rooms might be better. The method chosen last year may not be optimal this year.<\/li>\n
  2. Vehicle expenses: The choice between standard mileage and actual expenses can change if driving patterns or vehicle costs change.<\/li>\n
  3. Standard versus itemized deduction: This should be calculated every year. Taxpayers can \u2014 and should \u2014 choose the better option annually. For example, a year with significant charitable giving, mortgage interest, or taxes paid may favor itemizing, while another year may not.<\/li>\n<\/ol>\n

    The question to ask is: \u201cGiven my situation this year, what approach produces the best tax outcome for me?\u201d<\/p>\n

    Don\u2019t think about taxes only in April<\/strong><\/p>\n

    By the time a return is prepared, most tax outcomes are already decided. Tax efficiency is not a once-a-year exercise; it\u2019s an ongoing discipline.<\/p>\n

    Key areas where year-round planning matters:<\/strong><\/p>\n

      \n
    1. Retirement contributions \u2013Rothversus traditional: Choosing between a Roth 401(k) and a traditional 401(k) is fundamentally a tax decision: Should you pay taxes now (Roth), or defer taxes (traditional)? The right answer depends on both current and expected future tax rates.<\/li>\n
    2. Charitable-giving strategy: The tax benefit depends heavily on how you give. Donating appreciated securities instead of cash can eliminate capital gains tax. Bunching contributions into a single year can increase the likelihood of itemizing\u2014at least every other year.<\/li>\n
    3. Bonus and supplemental income withholding: Bonuses are often withheld at flat rates that may not reflect actual tax liability. This can create either cash flow drag or underpayment risk.<\/li>\n
    4. Investment decisions: Realizing gains, harvesting losses, and holding periods all affect after-tax returns.<\/li>\n<\/ol>\n

      The question to ask is: \u201cWhat decisions throughout the year will improve my after-tax outcome?\u201d<\/p>\n

      Don\u2019t confuse refunds with good tax planning<\/strong><\/p>\n

      Many taxpayers still equate a tax refund with success. In reality, a refund simply means you paid more than you should have, and that you gave an interest-free loan to the government. That capital could have been invested or deployed elsewhere during the year.<\/p>\n

      The question to ask is: \u201cAm I aligning my tax payments with my actual liability?\u201d<\/p>\n

      Efficient cash flow is part of overall good tax planning.<\/p>\n

      Don\u2019t let the tax tail wag the dog<\/strong><\/p>\n

      Tax considerations should inform decisions, not drive them. A deduction reduces the cost of an expense, but it doesn\u2019t eliminate it. Spending $1,000 to save $300 in taxes still results in a net outflow of $700.<\/p>\n

      This is particularly relevant for charitable contributions and investment decisions made for tax reasons rather than economic merit.<\/p>\n

      The question to ask is: \u201cDoes this decision make sense on its own, before considering taxes?\u201d<\/p>\n

      Don\u2019t assume doing it yourself always saves money<\/strong><\/p>\n

      Tax software has improved accessibility, but it hasn\u2019t replaced expertise.<\/p>\n

      For taxpayers, complexity often includes:<\/p>\n

        \n
      1. Capital gains and losses coordination<\/li>\n
      2. Multi-account asset location<\/li>\n
      3. Timing decisions across tax years<\/li>\n
      4. Interactions between income, deductions, and credits<\/li>\n<\/ol>\n

        Errors or missed opportunities can be subtle but costly over time.<\/p>\n

        The question to ask is: \u201cWhat is the long-term cost of suboptimal tax decisions?\u201d<\/p>\n

        Don\u2019t hesitate to ask\u2014even if the answer is no<\/p>\n

        Some of the most valuable tax strategies begin with simple questions, many of which initially seem unlikely.<\/p>\n

        For example, can I deduct my pet expenses? Usually no. But in specific cases, such as a legitimate service animal, these expenses may qualify as medical deductions.<\/p>\n

        The key is not whether a question leads to a \u201cyes,\u201d but whether it uncovers possibilities or clarifies boundaries.<\/p>\n

        The question to ask is: \u201cIs there any situation where this could apply to me?\u201d<\/p>\n

        The bottom line: Maximize wealth<\/strong><\/p>\n

        For taxpayers, tax planning is not about chasing deductions or minimizing a single year\u2019s bill. It\u2019s about maximizing after-tax wealth over time.<\/p>\n

        The most valuable questions:<\/p>\n

          \n
        1. Challenge assumptions<\/li>\n
        2. Focus on strategy, not just transactions<\/li>\n
        3. Integrate taxes into broader financial decisions<\/li>\n<\/ol>\n

          A simple shift from \u201cWhat can I write off?\u201d to \u201cHow should I plan?\u201d can materially improve long-term outcomes. And that\u2019s where thoughtful tax planning delivers its greatest value.<\/p>\n

          This article was provided to The Associated Press by Morningstar. For more personal finance content, go to https:\/\/www.morningstar.com\/personal-finance.<\/p>\n

          Sheryl Rowling, CPA, is an editorial director, financial adviser for Morningstar.<\/p>\n

          Related Links:<\/p>\n

          5 Smart Ways to Use Your Tax Refund: https:\/\/www.morningstar.com\/personal-finance\/5-smart-ways-use-your-tax-refund<\/p>\n

          3 Big Questions to Ask Your Aging Parents: https:\/\/www.morningstar.com\/personal-finance\/3-big-questions-ask-your-aging-parents<\/p>\n

          5 Money Questions Every Couple Should Ask: https:\/\/www.morningstar.com\/personal-finance\/5-money-questions-every-couple-should-askespecially-before-valentines-day<\/p>\n

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          Here are six common ways taxpayers get off track and the questions they should ask themselves during the tax year. Don\u2019t assume the answer is the same as last year Taxpayers often default to \u201csame as last year\u201d thinking. But tax outcomes depend on variables that shift constantly, like income, markets, tax laws, interest rates, […]<\/p>\n","protected":false},"author":1,"featured_media":1335,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1101,1102,149,152,1103,1104],"tags":[1943,1944,1945,1946,1947,1948,1949],"class_list":["post-1336","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-0-no-apple-publish","category-1gridmagazine","category-a-town-magazine","category-sentinel-lifestyle","category-uncategorized","category-z-other-galley","tag-charitable-giving-strategy","tag-cpa","tag-home-office-deduction","tag-morningstar","tag-retirement-contributions","tag-sheryl-rowling","tag-vehicle-expenses"],"yoast_head":"\nSix tax tips you should start thinking about now - Denver Moving Chronicle<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/denvermovingchronicle.com\/?p=1336\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Six tax tips you should start thinking about now - Denver Moving Chronicle\" \/>\n<meta property=\"og:description\" content=\"Here are six common ways taxpayers get off track and the questions they should ask themselves during the tax year. 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