What to Do After You File Your Tax Return

Whew! You or your tax preparer just pressed “send” and your tax return is off through the ether to the IRS. “I’m done with taxes for another year,” you say to yourself. Not so fast! Tax-planning is a year-round proposition and there is a lot you can do to be prepared for next year.

Below are nine steps to take after filing your tax return:

Learn From Your Return- It is smart to look beyond the amount of tax that you owed. Review your effective tax rate (the percentage of your income paid in taxes, calculated by dividing your tax paid by your taxable income), biggest deductions and credits, and largest income sources.

Ask Yourself Some Questions- Document “lessons learned” during this tax season to inform tax planning for next year. Write down: what surprised you (e.g., blind spots that you hadn’t considered), what was stressful, and what worked well to turn this year’s tax filing into a feedback loop.

Make a List of Carryovers- These are tax write-offs that you can use on future tax returns. Keep a running list and write them down so they don’t get forgotten next year. Think capital loss carryforwards and charitable donation carryovers.

Adjust Payroll Tax Withholding- This also goes for quarterly estimated tax payments and withholding for pensions and Social Security. If you owed a lot on your 2025 tax return, received a large refund, or expect big changes to your income in 2026, tweak your withholding now.

Review Itemized Deduction Potential- Itemizing deductions is generally not possible without proactive tax planning because the standard deduction is a very high hurdle to exceed. Consider bunching charitable donations, state and local taxes, and medical expenses to be able to itemize.

Consider Lifestyle Changes- Life events that can change the amount of future tax owed include marriage, divorce, widowhood, job changes, retirement, and relocation. These events should prompt proactive planning and not big surprises.

Update Your Record-Keeping Systems- Set up a system to organize documents related to 2026 income taxes if you had messy records before. This includes business mileage logs and receipts and documentation for tax write-offs (e.g., child and dependent care tax credit).

Schedule a Mid-Year Tax Check-Up- By July or August, you will have more clarity about your expected income and expenses than you do in February. Use this information to prepare a pro forma (projected) tax return so you can adjust tax planning strategies before it is too late.

Evaluate Capital Gains Exposure- Study your 1040 Form and consider where most of your tax bill came from. If capital gains are triggering a lot of tax, consider whether you have high turnover investments and concentrated positions. Try to purchase tax-efficient investments instead.

Bottom Line: A tax return provides a lens into your overall financial situation. Study it for insights that may lower your tax bill in the future. If you are working with a financial advisor, share it as an informational tool. Be proactive and don’t put taxes on the back burner until next year. 

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.

Barbservations from a Seminar about Annuities

 

Every once in a while, I attend a free financial seminar in my neighborhood. Going to these meetings provides content for blog posts and insights into the financial concerns and misperceptions of older adults. I then incorporate this information into my classes. Occasionally, I also get a free meal.

Recently, I attended a meal-free seminar about annuities. Below are some Barbservations:

 

Long Introduction- Fully one-third (20 minutes) of the 60-minute program was a lengthy description of the sponsoring company and its key staff.

 

Helpful Handout- The speaker distributed a very useful “one-stop” tax summary document, similar to this one, that contains all the 2026 numbers relating to income taxes and Social Security.

 

Business Model- The speakers earn income by charging a fee for assets under management (AUM) and mentioned a 1.2% base AUM fee with a lower percentage charged for higher wealth tiers.

 

Poor Educational Presentation- There were no PowerPoint slides. Instead, the speaker feverishly wrote numbers on newsprint paper and talked very quickly. In short, the talk was hard to follow.

 

I teach a class, myself, about annuities so it was difficult not to “fact-check” the presentation. Below were some “nuggets" that stood out to me as correct and useful information:

 

Annuities are a Tool- Annuities are neither good nor bad and they are not right for everyone. Also, they are both simple (give an insurance company money in exchange for a future stream of income) and complex (complicated features). Every contract is different, making “apples-to-apples comparisons difficulty.

 

Fixed Annuity Features- Fixed annuities are like CDs, but tax-deferred. When money is withdrawn, it is taxed as regular income. Initial returns are locked in for a certain period of time (e.g., 5, 7, or 10 years) and then fluctuate with market conditions. Look for a decent “floor” for downside protection.

 

Government Backing- There is no federal government insurance like FDIC backing annuities. Instead, there are state-administered guaranteed associations. In Florida, annuities are insured by the Florida Life & Health Insurance Guaranty Association (FLAHIGA), which covers up to $250,000 per owner per member company.

 

Indexed Annuity Caps- Annuities tied to an equity market index have caps, which are essentially fees because they reduce investment earnings. The example that was given was, if 2% is the maximum you can earn on an index annuity and the market returned 12%, the “fee” is 10%.

Risk-Free Investing- There is no such thing as a risk-free investment. All investments have some type of risk. When communicating with a financial advisor about risk, don’t say “I don’t want any risk.” Instead, say “I want as little risk as possible” and acknowledge that risk exists.

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.

Financial Tasks for a Cold Winter Day

Cold outdoor weather during the winter months means that now is a great time to perform indoor personal finance improvement activities. In addition to preparing an income tax return, below are ten financial management tasks to consider doing now so your finances are well organized when the weather gets warmer and you want to do things outside:

Financial Records Makeover- Develop a record-keeping system that works for you including folders in a desk drawer, plastic tote box, or file cabinet or digital records housed in a cloud server. Also take the time to shred unnecessary documents that contain sensitive personal information.

Credit Card Inventory- Make a list of all of your credit cards, their account number, expiration date, and CVC (security) code, and the phone number for customer service. If a card is lost or stolen, this information is readily available to report to the issuer.

Digital Assets Inventory- Make a list of usernames, passwords, PINs, and other data needed to turn on electronic devices and access accounts such as those for financial accounts, retailer accounts, and other online spaces. Doing so will help you and trusted others quickly access this information.

Automated Bill Payment List- Review the bills that you pay automatically and make list of the accounts that they are charged to (e.g., a checking account or credit cards). Also take some time to set up automatic bill-paying for recurring expenses (e.g., utilities, cell phone, and rent/mortgage).

Net Worth Statement- Add up the value of what you own (assets) and what you owe (debts) and subtract the debts from the asset to calculate your net worth. Net worth provides a “snapshot” of someone’s finances at a point in time and should be updated at least annually to monitor progress.

Credit Report Check-Up- Use the website www.annualcreditreport.com to review your credit report at the “Big Three” credit bureaus: Equifax, Experian, and TransUnion. Look for errors and evidence of identity theft. Also check with your bank or credit card issuer for a free credit score.

APY Comparison- Review available annual percentage yields on bank/credit union savings accounts, CDs, and money market accounts. Media outlets like NerdWallet and Bankrate identify high-paying insured accounts. The higher the APY, the more interest earned on savings.

Retirement Savings Analysis- Try at least three online calculators to see what they say you need to save to meet your retirement income target. Expect different results because their data inputs and assumptions vary. A range of numbers can inform financial decisions (e.g., amount of savings).

Beneficiary Designation Review- Make sure that people and/or organizations named as beneficiaries in your life insurance policies, annuities, and retirement savings plans are still those that you want to select. Ditto for personal representatives for your estate and your health care proxy.

Insurance Review- Make a list of your current insurance policies (e.g., auto, renters or homeowners, health, disability, and life) and their current cost. Then contact your current licensed insurance agent or agents from competing companies to discuss policy options and available discounts.

Stuck inside to stay warm? Got cabin fever? Choose one or more of the financial tasks listed above.

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.

 

Take-Aways From A Retirement 101 Seminar

 

I recently attended a Retirement 101 presentation at the community where I live. Truth be told, I went “undercover” to a free dinner seminar with several neighbors. 

My objectives were 1. To observe what older adults were being told about finances and what questions were on their mind, 2. To gather content for this blog post, and 3.To bring home a pulled pork dinner for my husband.

 Below are some key take-aways:

Financial Preferences- The presenter noted the following preferences among the older adults that he works with: 1. Less financial risk and more security, 2. A desire to lower taxes, 3. Simplicity and safety, 4. Reliable income now and later, and 5. “Fun” money for travel and entertainment.

Health and Money- Stress about finances (e.g., unpaid bills, running out of money, inflation, high tax bills) can affect overall physical health and reduce someone’s enjoyment of their later life years. Most people have no financial plan to guide their future.

Investment Characteristics- Bank accounts provide liquidity and are well-suited for emergency funds and short-term goals. Brokerage accounts include equities (stocks, mutual funds, exchange-traded funds) with growth potential. Annuities provide guaranteed income and life insurance provides a tax-free death benefit.

Three Types of Plans- Retirees need three types of plans: an income plan, a tax plan, and an estate plan. An income plan is needed to protect future income against inflation and address the income loss that occurs when one spouse in a married couple passes away.

Income Reduction Example- John and Jane currently have a $81,600 annual income: $30,000 (John’s pension), $24,000 (John’s Social Security), $9,600 (Jane’s pension), and $18,000 (Jane’s Social Security) for a total of $81,600. If John dies first and Jane receives half his pension and his full Social Security, her income would be $15,000 + $24,000 + $9,600 or $48,600, a 40% cut.

Long-Term Care- People need a plan to cover potential long-term care expenses, which are not covered by Medicare or Medigap supplemental plans. Recent average national annual costs for a nursing home, assisted living, and in-home care are $120,154, $53,088, and $50,918, respectively.

Inherited IRAs- When a surviving spouse inherits an individual retirement account (IRA) from a deceased spouse, the best option is generally to assume it and treat funds in the account as his or her own. Non-spouses have until December 31 of the 10^th year after the original owners death to withdraw the funds in an inherited IRA.

Bypassing Probate- Strategies to avoid probate include owning an asset with someone in joint tenancy with right of survivorship, payable on death (PoD) designations on bank accounts, Transfer on Death (ToD) designations on brokerage accounts, and beneficiary designations on assets such as life insurance policies, annuities, and retirement savings plans.

Adding Children’s Names to Accounts- This is rarely a good idea. Heirs lose the stepped-up basis that they would receive if the account was transferred following the account owner’s death. Also, adding a child’s name puts assets at risk during the account owner’s lifetime (e.g., creditors and lawsuits).

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.

 

The Rule of Three: A Personal Case Study

In the summer of 2025, residents of my Florida age 55+ community neighborhood found out that we had defective shingles installed on the roofs of our six-to-seven year old homes.

 

For the past eight months, we have been on a six-step odyssey to 1. file a claim with the shingles manufacturer, TAMKO, 2. send TAMKO photos and shingle samples, 3. get our roofs inspected by TAMKO, 4. receive a settlement check (or not), 5. select a roofing company, and 6. get a new roof installed. Some neighbors were denied a monetary settlement because they were second owners or their roofs “were not damaged enough.”

 

As part of the claims settlement process, we had to hire a roofing company to take photos of our roof and remove and replace two shingle strips, which we then mailed to TAMKO in a big plastic sleeve. TAMKO then sent an inspector to personally examine our roof as a check against someone mailing them more damaged shingles than they really have.

 

We were one of the fortunate ones and received a cash settlement. Our roof was deemed “damaged enough.” We then moved on to selecting a roofing company to install a new roof. Since this was a big (~$20,000) purchase and we were unfamiliar with local contractors, I used the “Rule of Three.”

 

With the Rule of Three, you compare the features of three competing product or service vendors head-to-head with respect to criteria that matter to you. In other words, an “apples-to-apples” comparison. It works best for large occasional purchases. The last time I used the Rule of Three was selecting a septic system repair company in New Jersey to sell our home in 2019.

 

I used the Rule of Three worksheet that I developed years ago for financial education classes. Listed below are the search criteria that I used to select a new roof installer:

 

• §  Price
• §  Included and excluded services
• §  Brand of shingles used and its warranty
• §  Available Veteran’s discount
• §  Company responsiveness (or not)
• §  Workmanship warranty length
• §  Credit card merchant’s fee
• §  Company certifications
• §  Other observations (e.g., informational materials and ability to negotiate terms)

Once I collected roofing company contract proposals and cost estimates, I completed a Rule of Three worksheet and summarized the data in one place. Next, I highlighted good features (e.g., ten year workmanship warranty vs. five years) and bad features (e.g., requiring customers to remove lightning rods and satellites on their roof vs. including this as a service). The highlighted items helped determine my optimal choice, which turned out to be the middle price point.

Got a big purchase coming up? Use the Rule of Three to narrow down your options.

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.