Autumn leaves in our backyard stream. (Photo by Kay Bell)
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So, how’s your end-of-summer celebration going?
Yep, in addition to today being Labor Day, the commemoration of the gains made to improve workers’ lives, Sept. 1 also is the unofficial end of our annual summer break.
Youngsters (and teachers) are headed back to classrooms. When today’s three-day weekend is over, employees will be back at their offices, with the next extended break not until the holidays months from now.
And most of us have some tax tasks to take care of this month.
I know, adding taxes to school and work just seems like piling on. But actually, some of these moves could help make your tax life easier. Some could even save you some money.
So, let’s get to it! Here are five tax moves to take care of this September.
1. Make your third 1040-ES payment. Millions of us must make multiple tax payments each year. One of them is the estimated tax payment due on Sept. 15.
These added filings, with deadlines on the 15th of each April, June, September, and the next January, take care of tax due on income that’s not subject to payroll withholding. This includes amounts such as investment earnings, pay from gig work or other self-employment income, and those random wagers that occasionally pay off. Even some Social Security recipients need to pay estimated taxes since a portion of their federal retirement payments are taxable.
If you must make an estimated tax payment this month, the easiest way to do so is electronically. Don’t miss it. A late estimated tax payment could end up costing you penalty and interest charges.
2. Look into buying an electric vehicle. If you’ve been considering an electric vehicle, then you need to head to the dealership ASAP. The One Big Beautiful Bill (OBBB) Act has moved up the deadline for being able to claim an EV tax credit.
Now, to get the potential $7,500 tax break for a qualifying new EV, or up to $4,000 for a eligible used one, you must act by Sept. 30.
The one bit of good news is that the Internal Revenue Service’s recently issued guidance says you can lock in the tax credit, with is a dollar-for-dollar offset of any tax you owe, as long as you have a written binding contract and have made a down payment by the end of this month.
3. Review, and possibly adjust, your withholding. There is nothing worse than a big surprise tax bill. You can avoid being in that unwanted situation at filing time by reviewing, and adjusting if needed, your withholding now.
The IRS’ online Tax Withholding Estimator can help you determine whether you need to give your employer a new Form W-4 .
September is good time to do this, especially if you find you need to have more withheld each pay period. The added amount will be spread over the four remaining months of the year so the payday bite shouldn’t be too severe.
If, however, you’ve been overwithholding each pay day, adjusting your withholding now will get you, instead of Uncle Sam, the recalculated tax money. And that could give you some added holiday shopping cash.
4. Add to your retirement plan. Or, you could use your withholding tweaked extra income to feather your nest egg. Since you haven’t been getting that money anyway, simply have that amount automatically added each pay period to your 401(k) or similar workplace account.
You also can contribute to an individual retirement account, either traditional or Roth. Sure, you have until next year’s Tax Day to make your 2025 contributions. That’s up to $7,000 to either type of IRA; $8,000 if you’re 50 or older. But by adding the money now, you give the power compounding more time to work in your favor.
5. File your extended tax return. Yes, this post is on September tax moves and yes, your extension to file gives you until Oct. 15 to get your return to the IRS. But why wait? The IRS will gladly take your return as soon as you’re done procrastinating. Like today. Or any day in September.
You also can do so electronically and at no cost if your adjusted gross income is $84,000 or less, regardless of your filing status, by using the IRS’ Free File option. The eight tax software companies participating this year will be available through Oct. 15.
And by getting your extended taxes out of the way now means you won’t have to worry about the October deadline sneaking up on you.
More tax monthly moves: Sept. 1 also is the arrival of meteorological fall. Yeah, I know; it’s still hot here in Central Texas, too.
But if this official climatological shift and the prospect of coming cooler weather gives you any added tax energy, you can find more 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.
For now, though, there’s plenty to take care of this September. Starting tomorrow, after we make the most of our Labor Day break.
