One tax strategy,
every month.

The IRS expects you to pay tax as you earn income — not in one lump next April. If you're self-employed, have investment income, or otherwise don't have enough withheld, quarterly estimated payments are how you stay square. Miss the mark and the IRS charges an underpayment penalty, which is really just interest — but at current rates, it's meaningful.

Here's the part most people don't know: you don't have to guess this year's income correctly. The safe harbor rule says you owe no penalty as long as you pay in at least 100% of last year's total tax (110% if your prior-year income topped $150,000) through withholding and equal quarterly estimates. Your income can double — no penalty, as long as you hit the safe harbor and settle the balance in April.

January 15 is the final estimated payment for last year, which makes this the natural month to set the strategy: we take your prior-year return, calculate the safe harbor number, and divide it into four payments. Predictable, penalty-proof, and no April surprises about interest charges on top of the tax itself.

Every tax-advantaged account gives you one or two breaks. A traditional 401(k) is deductible going in but taxed coming out. A Roth is taxed going in but tax-free coming out. The Health Savings Account is the only account that wins on all three ends: contributions are deductible, growth is tax-free, and withdrawals for medical expenses are tax-free too.

To contribute, you need to be enrolled in a high-deductible health plan. If you are, the real strategy isn't using the HSA as a spending account — it's using it as a stealth retirement account. Pay current medical bills out of pocket if you can afford to, invest the HSA balance, and let it compound untouched. There's no deadline for reimbursing yourself, so a shoebox of saved medical receipts becomes tax-free money you can pull out any time. And after age 65, withdrawals for any purpose are simply taxed like a traditional IRA — no penalty.

February matters here for one reason: like an IRA, you can still make a prior-year HSA contribution until April 15. If you had eligible coverage last year and didn't max the account, that deduction is still on the table while we prepare your return.

If you run a profitable LLC or sole proprietorship, every dollar of profit is hit with self-employment tax — 15.3% for Social Security and Medicare — on top of income tax. An S-corporation election changes the math: you pay yourself a reasonable salary (which is subject to payroll tax), and the remaining profit passes through as a distribution that avoids self-employment tax entirely.

For a business clearing, say, $150,000, the savings can easily reach five figures a year. But it's not free money — an S-corp means running real payroll, filing a separate business return, and defending that "reasonable salary" number if the IRS ever asks. Our rule of thumb: the election starts making sense once profits are consistently well above what you'd have to pay yourself as salary.

The timing hook: to have S-corp status apply for the current year, Form 2553 is generally due by March 15. File later and you're usually waiting until next year (though late-election relief exists in some cases). If your business has grown and nobody has run this analysis, March is the month to have the conversation — not December.

There's a persistent myth that filing an extension invites an audit. It doesn't. Millions of accurate, well-prepared returns are filed on extension every year — often because the taxpayer was waiting on a late K-1 or corrected brokerage form. A rushed return with wrong numbers is far riskier than an extended one with right numbers.

What an extension does not do is give you more time to pay. The tax is still due April 15. File the extension without paying and two meters start running: the failure-to-pay penalty (0.5% per month) plus interest. Skip the extension entirely and the failure-to-file penalty is ten times worse — 5% per month, up to 25% of the balance. Moral: always file something by April 15, even if you can't pay a dime.

The right move when you extend: estimate your liability conservatively, pay that amount with the extension, and square up when the return is finished. And if you genuinely can't pay, the IRS offers installment agreements that are simple to set up — owing money is a solvable problem; ignoring the filing deadline is an expensive one.

Spring is selling season, so here's the rule every homeowner should know: if you've owned and lived in your home for at least two of the last five years, up to $250,000 of gain is completely tax-free — $500,000 for a married couple. For most families, that makes the home sale a non-event on the tax return.

But in our area, it's no longer safe to assume you're under the cap. A house bought in Montgomery or Fairfax County twenty years ago can easily carry more than $500,000 of appreciation. That's where basis becomes your best friend: your gain isn't sale price minus purchase price — it's sale price minus purchase price plus every capital improvement you've ever made. The new roof, the remodeled kitchen, the finished basement, the deck — each one reduces the taxable gain dollar for dollar.

The tip, then, is boring but valuable: keep a permanent file of every improvement receipt for as long as you own the home. If a sale might put you over the exclusion, talk to us before you list — timing, improvement documentation, and how the exclusion interacts with home-office depreciation are all easier to handle in advance than after closing.

If you own a business and have children, summer break is a tax planning opportunity. Wages you pay your child for legitimate work are a deductible business expense to you — shifting income out of your bracket and into theirs, where the standard deduction (over $15,000) means they likely owe nothing at all.

It gets better for sole proprietorships and spousal partnerships: wages paid to your child under 18 are exempt from Social Security and Medicare taxes entirely. And here's the compounding move — a child with earned income can fund a Roth IRA. A few summers of contributions in a teenager's Roth, growing tax-free for fifty years, is one of the most powerful wealth transfers available at any income level.

The guardrails matter: the work must be real (filing, cleaning the shop, social media, deliveries), the wage must be reasonable for the task, and you should keep timesheets and pay through actual payroll — not a year-end journal entry. Done properly, this is squarely inside the rules. Done sloppily, it's the first thing an auditor unwinds. We can help you set it up the right way.

For many of our clients, the years between retirement and age 73 are the lowest-tax-bracket years of their adult lives. The paycheck has stopped, Social Security may not have started, and required minimum distributions haven't kicked in yet. That window is a one-time opportunity — and a Roth conversion is how you use it.

A conversion moves money from a traditional IRA to a Roth IRA. You pay ordinary income tax on the amount converted now, and in exchange that money grows tax-free forever, with no RMDs, and passes to your heirs tax-free. The strategy is to convert just enough each year to "fill up" your current low bracket — say, converting up to the top of the 12% or 22% bracket annually — rather than leaving the money to come out later at higher rates.

Why later rates are often higher: once RMDs begin at 73, distributions are forced whether you need the money or not, stacking on top of Social Security and pension income. Large IRA balances can push retirees into higher brackets, trigger Medicare premium surcharges (IRMAA), and make more of their Social Security taxable. Converting during the quiet years shrinks the future RMDs at the source.

Mid-year is the right time to plan this: we project your full-year income, find the bracket headroom, and size the conversion precisely. It's one of the highest-value conversations we have with clients approaching or entering retirement.

A 529 plan is the workhorse of education savings: contributions grow tax-free and withdrawals are tax-free when used for tuition, fees, books, room and board, and even up to $10,000 per year of K–12 tuition. There's no federal deduction for contributing — but our states sweeten the deal.

Maryland allows a deduction of up to $2,500 per account holder, per beneficiary, per year (excess contributions carry forward). Virginia allows up to $4,000 per account, per year, with unlimited carryforward — and no cap at all once the account owner reaches 70. Two parents each owning accounts for two kids can stack meaningful state deductions annually just for saving money they'd save anyway.

Worried about overfunding? Recent rules added a safety valve: after 15 years, unused 529 funds (up to a lifetime cap of $35,000) can be rolled into a Roth IRA for the beneficiary. Between that, changing beneficiaries within the family, and graduate school, "money trapped in a 529" is largely a solved problem. If college is anywhere on your horizon — kids or grandkids — this is the account to look at while the back-to-school receipts are still on the counter.

For a profitable owner-only business, no single move creates a bigger deduction than a retirement plan — potentially $70,000 or more set aside per year, every dollar of it deductible. The two main vehicles are the SEP-IRA and the Solo 401(k), and which one wins depends mostly on your income level.

The SEP-IRA is simplicity itself: contribute up to 25% of compensation, no annual filings, can be opened and funded as late as your extended filing deadline. The Solo 401(k) takes slightly more paperwork but usually allows bigger contributions at moderate incomes, because you contribute twice — once as the employee (up to $23,500, plus catch-up if 50+) and again as the employer (25% of compensation). At $100,000 of income, the Solo 401(k) roughly doubles what a SEP allows. It also supports a Roth option, which the SEP generally doesn't.

Why this is a September article: a Solo 401(k) must generally be established before year-end to capture the full employee contribution for this year — set it up in February and you've missed the window. Fall is when we project year-end profit and pick the right plan while every option is still open.

Since the standard deduction nearly doubled, most households no longer itemize — which means their charitable donations, while generous, produce zero tax benefit. The fix isn't giving more or less. It's changing the timing.

Bunching means concentrating two or three years of giving into a single tax year — enough to clear the standard deduction and itemize that year — then taking the standard deduction in the off years. Same total generosity, meaningfully lower tax over the cycle.

The tool that makes this painless is the donor-advised fund: contribute a lump sum this year (cash, or better yet, appreciated stock), take the full deduction immediately, then recommend grants to your charities on whatever schedule you like — your church or favorite causes still receive their usual annual support. Donating appreciated stock adds a second win: you deduct the full market value and nobody ever pays the capital gains tax.

October is the time to run the numbers, because the contribution has to land before December 31 — and custodians get backed up processing stock transfers in late December. One planning conversation now can set up your giving for the next three years.

In a taxable brokerage account, paper losses have real value — but only if you take them. Tax-loss harvesting means selling positions that are underwater, capturing the loss, and immediately reinvesting in something similar so you stay in the market. The loss first offsets your capital gains dollar for dollar; up to $3,000 of any excess offsets ordinary income, and the rest carries forward indefinitely.

The one rule that trips people up is the wash sale rule: buy the same (or a "substantially identical") security within 30 days before or after the sale and the loss is disallowed. The standard playbook is to swap into a similar-but-not-identical fund — one broad index fund for another — so your portfolio barely notices while the loss goes on the books. Watch out for dividend reinvestment and repurchases in your IRA or spouse's account; those trigger wash sales too.

Two more November notes: mutual funds announce their year-end capital gain distributions around now — avoid buying into a fund right before it pays one in a taxable account. And harvesting has to settle by December 31, so this is a task for November, not New Year's week. If your portfolio took losses this year, don't let them expire unused.

If you're 70½ or older and give to charity, the qualified charitable distribution is almost certainly the best way to do it. A QCD sends money directly from your IRA to the charity — up to $108,000 per person per year — and the amount never appears in your adjusted gross income at all.

That beats a normal deduction for two reasons. First, most retirees take the standard deduction, so ordinary donations produce no tax benefit — but a QCD works regardless, because it's an exclusion, not a deduction. Second, keeping the money out of AGI protects everything downstream that's calculated from it: how much of your Social Security is taxable, Medicare premium surcharges (IRMAA), and various phase-outs. Lower AGI quietly saves money in places a deduction can't reach.

Best of all, once RMDs begin at 73, a QCD counts toward your required distribution. Facing a $30,000 RMD you don't need? Send $10,000 of it straight to your church or favorite charity and only $20,000 lands on your return as income.

The mechanics matter: the check must go directly from the IRA custodian to the charity — touch the money yourself and it's ordinary income. And it must clear by December 31, so start the paperwork early in the month. Tell us about any QCDs when we prepare your return; the 1099-R won't flag them, and we make sure they're excluded properly.