5 Tax Mistakes I See Every Fall (And How to Avoid Them)
Every September, the same patterns show up. Here's what to watch for.
After decades in tax and financial planning, I can tell you that fall is when the year starts to get away from people. Summer winds down, the holidays loom, and somewhere in the middle, the tax decisions that actually matter get pushed to the back burner. By the time January rolls around, the window on most of them has closed.
These are the five mistakes I see most often. None of them are complicated to fix if you catch them in time.
1. Missing the September 15th Estimated Tax Payment
This one surprises people every year. If you're self-employed, have significant investment income, or your withholding doesn't cover what you owe, you're likely required to make quarterly estimated payments. One of those is due September 15th. Miss it, and you're looking at a penalty, even if you pay everything in full come April. If you're not sure whether this applies to you, now is the right time to find out.
2. Waiting Until December to Think About Roth Conversions
Roth conversions are one of the best planning tools available, but they take time to do right. You need to know where your income is landing for the year before you decide how much to convert, and if you wait until late December, you're rushing a decision that deserves careful thought. Fall is the right time to run the numbers, look at your bracket, and decide whether a conversion makes sense this year. Done well, a Roth conversion today can mean years of tax-free growth down the road.
3. Ignoring Tax-Loss Harvesting
(We already do this for our clients, automatically!)
Markets go up and down. When they go down, there's actually an opportunity. You can sell positions that are sitting at a loss, lock in that loss to offset gains elsewhere in your portfolio, and reinvest in something similar. It's called tax-loss harvesting, and it's one of the most overlooked strategies out there. But you have to do it before December 31st, and frankly, the earlier you look, the more flexibility you have. I've seen people leave real money on the table simply because they didn't look until it was too late.
4. Not Revisiting Withholding After a Life Change
Got married this year? Had a child? Changed jobs, or started picking up extra income on the side? Any of those events can throw your withholding off, and if you haven't updated your W-4 or adjusted your estimated payments, you may be in for a surprise in April. Fall is a natural checkpoint. Enough of the year has passed that you can see where things are headed and still make corrections before December 31st.
5. Leaving Retirement Contributions on the Table
This one is straightforward, but the deadlines are worth understanding. 401(k) contributions must be made by December 31st. There's no grace period, so if you're not on pace to maximize yours, fall is when you need to know that. IRA and Roth IRA contributions are more flexible; you have until April 15th of the following year to make them, which gives you more runway. SEP-IRA contributions can be made even later, up to the due date of your tax return including any extensions.
That said, fall is still the right time to check where you stand. Contribution limits adjust each year, and if you're planning to max out, knowing your numbers now lets you spread contributions over the remaining months rather than scrambling at the deadline. The money you put in grows tax-deferred (or tax-free in a Roth), and there's no way to go back and contribute for a year you've already closed on the 401(k) side.
The Common Thread
None of these are exotic strategies. They're the basics. But they require attention at the right time of year. If you're not sure where you stand on any of them, that's exactly the kind of conversation worth having before the year gets away from you.
Feel free to reach out. I'm happy to take a look.