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Articles From Lumsden McCormick

Tax Moves to Consider in Summer

Now is a good time to think about a few financial matters.

 Provided by Bryan J. Staniszewski, CPA/PFS, CFP®, AIF®, MBA

Making changes earlier rather than later. If you own a business, earn a good deal of investment income, are recently married or divorced, or have a Flexible Savings Account (FSA), you may want to think about making some tax moves now rather than in December or April.

Do you now need to pay estimated income tax? If you are newly self-employed or are really starting to see significant passive income, you may need to quickly acquaint yourself with Form 1040-ES and the quarterly deadlines. Every year, estimated tax payments to the Internal Revenue Service are due on or before the following dates: January 15, April 15, June 15, and September 15. (These deadlines are adjusted if a due date falls on a weekend or holiday.) It might seem simple just to make four consistent payments per year, but your business income may be inconsistent. If it is, and you fail to adjust your estimated tax payment per quarter, you may be setting yourself up for a tax penalty. So, confer with your tax professional about this.1

Has your household size changed? That calls for a look at your pre-tax withholding. No doubt you would like to take home more money now rather than wait to receive it in the form of a tax refund later. This past April, the I.R.S. said that the average federal tax refund was $2,864 – the rough equivalent of a month’s salary for many people. Adjusting the withholding on your W-4 may bring you more take-home pay. Ideally, you would adjust it so that you end up owing no tax and receiving no refund.2

Think about how you could use your FSA dollars before the end of the year. The Tax Cuts & Jobs Act changed the rules for Flexible Spending Accounts (FSAs). The I.R.S. now permits an employer to let an employee carry up to $500 in FSA funds forward into the next calendar year. Alternately, the employer can allow the FSA accountholder extra time to use FSA funds from the prior calendar year (up to 2.5 months). Companies do not have to allow either choice, however. If no grace period or carry-forward is permitted at your workplace, you will want to spend 100% of your FSA funds in 2018, for you will lose those FSA dollars when 2019 begins.3

You could help your tax situation by contributing to certain retirement accounts. IRAs and non-Roth workplace retirement plans are funded with pre-tax dollars. By directing money into these retirement savings vehicles, you position yourself for federal tax savings in the year of the contribution. If you make the maximum traditional IRA contribution of $5,500 in 2018, and you are in the 24% tax bracket, that translates to a $1,320 federal tax deduction for 2018.4

While Summer may seem far from April, this is an excellent time to think about tax-saving possibilities. You and your tax professional have plenty of time to explore the options.

Bryan Staniszewski may be reached at 716-856-3300 or bstaniszewski@lumsdencpa.com       



This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities offered through 1st Global Capital Corp., Member FINRA, SIPC.  Investment Advisory services offered through 1st Global Advisors, Inc.   


1 - irs.gov/faqs/estimated-tax/individuals/individuals-2 [2/20/18]

2 - fortune.com/2018/04/16/tax-day-2018-refund/ [4/16/18]

3 - cnbc.com/2017/12/29/how-to-use-your-flexible-spending-account-funds-at-the-last-minute.html [12/29/17]

4 - usatoday.com/story/money/taxes/2018/07/20/70-of-households-are-missing-out-on-this-important-tax-break/36835905/ [7/20/18]


Tax Moves to Consider in Summer

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Bryan joined Lumsden & McCormick Financial Services in 2012 with over 15 years of experience in investment services. Bryan delivers custom, holistic solutions that fit an individual’s entire financial situation, understanding the importance of cash flow, the role of taxes, wealth preservation, and how legacy building and overall wealth goals factor into the creation of a comprehensive wealth plan.


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