May’s merriment may not seem synonymous with taxes, but this month is a great time to make some Internal Revenue Service-inspired moves. These three could get your 2026 tax situation on a money-saving track.
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I know I’m a few days late with the May tax moves. I got caught up in the month’s merry making.
Now, with May Day and other early-month festivities over — Okay, almost over, once we enjoy Taco Tuesday’s fortuitous convergence with Cinco de Mayo. — it’s time to again focus on our taxes.
Sorry and really.
I know. You thought you were done when you got your 1040 to the Internal Revenue Service on April 15. Or you thought you wouldn’t have to think about taxes for six more months when you instead filed for an extension.
But May is the perfect time to get your 2026 tax situation on a money-saving track. Here are three quick suggestions that could help.
Adjust your withholding. Regardless of whether you owed a lot of taxes or got a big refund this year, both circumstances are an indication you might want to revise your paycheck withholding amount. The goal generally is to come as close as possible to your eventual tax bill.
Yes, a tax refund is a handy savings account, and over-withholding is an easy way to set up an account with the Bank of Uncle Sam. But note that he pays no interest on your money. You also have to wait until you file to get it.
But by adjusting your withholding, you’ll have access to your money in every paycheck throughout the rest of the year. If you’re worried you’ll just blow it, set up a savings account at your bank or credit union and have what was going to the Treasury automatically sent instead to your new account.
As for those of us who are all too familiar with owing on April 15, paycheck withholding tweaks can help here, too. Yes, your paycheck will be a bit lighter, but you won’t have to scramble to cover a large Tax Day bill. And the sooner you make the adjustment, the change will be spread over more paychecks, making them less drastic.
You can find your proper withholding amount by using the IRS’ online tax withholding estimator. Then use the data to complete a new Form W-4 for your payroll administrator to implement.
Add to your nest egg. Another way to use that money you, not the tax collector, now will get is to add to your retirement savings.
If you have a workplace 401(k) plan, increase your paycheck contributions to that account. The net effect should be the same as for those who opted to save the new withholding amount. Your money is going to you, with your paycheck staying the same amount as it was before.
Most companies let their employees change their 401(k) contribution amounts at any time, but double check with your payroll and benefits administrators. By making changes sooner, you give your retirement nest egg more time to grow.
If you don’t have a workplace retirement plan, consider an IRA. You have the choice of a tax-deferred traditional IRA, which could give you a tax deduction next filing season, or a Roth IRA.
Younger workers, and I’ll let you decide just what younger is, generally find a Roth IRA is the better choice. Already taxed contributions to a Roth account mean no taxes when, many years from now, you take distributions on your, not the IRS’ required minimum distribution, timetable.
Hang on to your kids’ day camp receipts. School is winding down, and many parents have made arrangements for their youngsters to spend time at a day camp.
Day camps solve a lot of parental summer supervision concerns. They cost less than sleep-away camps, and you don’t have to worry about bouts of homesickness. The variety of day damps is astounding, so you should be able to find a camp that suits your child’s interests. Plus, you get to see your youngsters in the evenings to learn about the day’s fun activities.
From the tax perspective, the cost of day-only camps counts toward claiming the child and dependent care credit.
It takes more paperwork (Form 2441) and calculating based on requirements to claim the child care credit. But in the end, the credit could be worth a maximum of $1,050 for one child’s care or up to $2,100 for two or more children.
And since it’s a tax credit, whatever applicable credit amount applies to your family means it will reduce your tax bill dollar-for-dollar.
Also, a provision in last year’s One Big Beautiful Bill Act enhances the tax break a bit starting this year. Now, some lower-earning parents can claim up to 50 percent (instead of the previous 35 percent) of eligible childcare expenses. The qualifying expenses amount remain at $3,000 for one person and $6,000 for two or more cared-for dependents.
Regardless of where on the child care credit claimant scale you fall, make sure you have the documentation, including your child’s camp receipts and details about the care provider, so you can get the most out of this tax break next filing season.
There, that wasn’t so bad was it? There’s still plenty of May days to enjoy.
And if any of these May Tax Moves can help lower your taxes a bit, or make filing them next year a bit easier, then it was worth a momentary tax detour this month.
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