Most of us do not particularly enjoy thinking about taxes in March or April– let alone during summer.

But that is exactly why a mid-year tax check-up can be so valuable.

By the time you prepare your tax return, the tax year has already ended. Your income has been earned, investments may have been sold, retirement distributions have already occurred, and many opportunities to make adjustments have passed.

A mid-year review gives you something tax season cannot:

Time to make changes.

You can review what has happened during the first part of the year, compare it with what you expected, and make adjustments before December 31.

Maybe your income increased. Maybe your spouse changed jobs. Perhaps you started freelancing, bought a business vehicle, welcomed a new baby, changed health insurance, sold investments, or began taking retirement income.

Any of those changes could affect your tax situation.

Here are ten areas worth reviewing as part of your 2026 mid-year tax planning check-up.

Mid-Year Tax Check-Up: Quick Checklist

Before getting into the details, here is a simple overview of what you should be reviewing:

• Changes in income
• Federal tax withholding
• Estimated tax payments
• Marriage, divorce, dependents, or other life changes
• Marketplace health insurance
• Retirement contributions
• Itemized deductions and charitable contributions
• Business income, expenses, and documentation
• Major financial transactions
• Credits and deductions requiring documentation
• Capital gains and losses
• Roth conversion opportunities
• Year-end charitable planning
• Overall tax strategy before December 31

You do not need to make a change in every category.

The goal is simply to identify anything that looks different today than it did when the year began.

1. Review Changes in Your Income

Start with the biggest piece of your tax picture: income.

Think about what you expected to earn in January compared with what has actually happened.

Has your income gone up?

Has it gone down?

Did you add a new income source that was not part of the original plan?

Changes worth reviewing include:

• An increase or decrease in wages
• Starting a new job
• Losing a job
• Increasing or reducing work hours
• Receiving unemployment compensation
• Beginning freelance or contract work
• Starting a side business
• Receiving more 1099 income
• Taking a retirement-account distribution
• Receiving a retirement distribution before age 59½
• Changes in rental income
• Capital gains from investments already sold
• Changes in business revenue
• Bonuses, commissions, or other unexpected compensation

Why Income Changes Matter

Your income affects much more than your tax bracket.

It can influence:

• Your overall federal tax liability
• Eligibility for certain tax credits
• Deductions subject to income limits
• Retirement contribution eligibility
• Marketplace Premium Tax Credits
• Capital gains tax rates
• Estimated tax requirements
• Medicare-related income thresholds for some taxpayers

A substantial increase in income may mean you need additional withholding or estimated payments.

A substantial decrease might create new tax-planning opportunities or change eligibility for certain credits or deductions.

Mid-Year Tax Goal

Estimate your expected full-year income, not simply what you have earned so far.

If you earned $50,000 during the first six months, that does not automatically mean your annual income will be $100,000. Seasonal businesses, bonuses, commissions, retirement distributions, investment sales, and employment changes can make income uneven.

The goal is to build the most realistic year-end estimate possible.

2. Check Whether Your Paycheck Withholding Is Still Right

One of the most common tax-season surprises comes from withholding that no longer matches a taxpayer’s actual situation.

Your employer withholds federal income tax based largely on the information provided on Form W-4.

But the W-4 you completed months– or years– ago may no longer reflect your life today.

You may want to review withholding after:

• Marriage
• Divorce
• Having or adopting a child
• A dependent no longer qualifying for a particular credit
• Starting a second job
• A spouse starting or leaving a job
• A major increase or decrease in wages
• Beginning freelance work
• Receiving significant investment income
• Starting retirement distributions

The IRS updated its Tax Withholding Estimator in 2026 to reflect current law, including newer provisions involving tips, overtime, qualified vehicle-loan interest, the senior deduction, family credits, charitable giving, and other changes.

Why Check Withholding Mid-Year?

If too little has been withheld, you may be headed toward an unexpected balance due.

If substantially more is being withheld than necessary, you may receive a larger refund– but you have also had less of your paycheck available throughout the year.

There is no universally “correct” refund amount.

Some taxpayers intentionally prefer a larger refund. Others would rather have more accurate withholding and keep more cash in each paycheck.

The important thing is to make that choice knowingly rather than being surprised in April.

Mid-Year Tax Goal

Compare:

Federal tax already withheld + expected withholding for the rest of the year

with your projected federal tax liability.

If there is a substantial gap, you still have time to adjust Form W-4.

3. Review Your Estimated Tax Payments

If you are self-employed, receive significant 1099 income, own a business, earn rental income, or receive substantial investment income, estimated tax payments may be part of your tax plan.

Mid-year is a particularly useful time to ask:

• Were my first estimated payments large enough?
• Has my income increased or decreased since I calculated them?
• Am I still on track to meet an IRS safe harbor?
• Should my remaining payments be adjusted?

For 2026, the regular individual estimated-tax payment dates are:

• April 15, 2026
• June 15, 2026
• September 15, 2026
• January 15, 2027

So by the middle of the year, you typically have actual financial results from the first two payment periods and can make a much better projection for the rest of the year.

Remember the Estimated Tax Safe-Harbor Rules

Generally, estimated payments may be required if you expect to owe at least $1,000 after withholding and refundable credits and your withholding and credits will be less than the smaller of:

• 90% of the tax shown on your current-year return, or
• 100% of your prior-year tax

For certain higher-income taxpayers, the prior-year safe harbor becomes 110% instead of 100% when the prior-year adjusted gross income exceeded $150,000, or $75,000 if Married Filing Separately.

A Useful Mid-Year Comparison

Business owners and self-employed taxpayers may benefit from comparing:

January through June of this year

with:

January through June of last year

Look for changes in:

• Revenue
• Profit
• Expenses
• Estimated payments
• Payroll
• Major purchases
• New clients or lost clients

Then incorporate what you realistically expect during the second half of the year.

Mid-Year Tax Goal

Make sure your estimated payments still reflect your actual income instead of continuing to send amounts calculated from outdated assumptions.

4. Consider Any Major Life Changes

Your tax return should reflect the life you are actually living now– not the life you had when you filed last year’s return.

Ask yourself whether anything changed involving:

• Marriage
• Divorce or legal separation
• A new baby
• Adoption
• Dependents moving into or out of your home
• Children graduating
• Children beginning college
• Older children becoming financially independent
• Childcare
• Changes in custody arrangements
• Death of a spouse or dependent

These events can affect your:

• Filing status
• Standard deduction
• Child Tax Credit
• Credit for Other Dependents
• Earned Income Tax Credit
• Child and Dependent Care Credit
• Education credits
• Premium Tax Credit
• W-4 withholding

Be Careful With “Aging Out” of Tax Credits

A child does not simply stop mattering for tax purposes the moment they turn 17.

For the Child Tax Credit, a qualifying child generally must be under age 17 at the end of the tax year.

However, an older child who still qualifies as your dependent may potentially qualify for the Credit for Other Dependents or affect other tax benefits, depending on the circumstances.

College students can also have separate dependency and education-credit considerations.

Mid-Year Tax Goal

Identify family changes now so you can adjust withholding and begin collecting any documents you will need at tax time.

5. Review Marketplace Health Insurance Carefully

If you purchased health insurance through the Health Insurance Marketplace and receive Advance Premium Tax Credit payments, this deserves special attention in 2026.

The amount of Advance Premium Tax Credit paid during the year is based partly on the household income and family information you estimated when applying for coverage.

But life rarely follows a January income estimate perfectly.

Changes that can affect your Premium Tax Credit include:

• Higher or lower household income
• Marriage
• Divorce
• Birth or adoption
• Changes in dependents
• Becoming eligible for employer-sponsored coverage
• Becoming eligible for certain government health coverage
• A change of address
• Retirement-account distributions
• Large capital gains

The IRS recommends reporting relevant changes to the Marketplace when they happen so the amount of advance credit can be adjusted.

A Major Premium Tax Credit Change for 2026

This is especially important in 2026 because the rules changed.

For tax years after 2025, there is no longer a repayment cap for excess Advance Premium Tax Credit.

If the advance credit paid on your behalf is greater than the Premium Tax Credit you ultimately qualify for, you generally must repay the full excess amount through your tax return.

That can reduce your refund or increase the tax balance you owe.

Example

Suppose you estimated a certain household income when enrolling in Marketplace coverage.

Halfway through the year, you:

• Receive a significant raise,
• Take a large taxable retirement distribution, or
• Realize a substantial capital gain.

If your Marketplace income estimate is not updated, the advance tax credit being paid for your insurance may no longer match what you actually qualify for.

That difference is reconciled on Form 8962 when you file your return.

Mid-Year Tax Goal

Compare the income you originally estimated for Marketplace coverage with your current projected annual household income.

If there is a meaningful difference, update the Marketplace rather than waiting until tax season to discover the tax impact.

6. Check Your Retirement Contribution Strategy

Mid-year is also a useful time to review whether you are on track with retirement savings.

Look at contributions to:

• 401(k) plans
• 403(b) plans
• Governmental 457 plans
• Thrift Savings Plan accounts
• Traditional IRAs
• Roth IRAs
• SEP plans
• SIMPLE plans
• Other applicable employer retirement accounts

For 2026, the general employee contribution limit for most 401(k), 403(b), governmental 457 plans, and the Thrift Savings Plan is $24,500.

The regular catch-up limit for participants age 50 or older is generally $8,000, while participants ages 60 through 63 may qualify for a higher $11,250 catch-up amount.

For IRAs, the 2026 contribution limit is $7,500, with an additional $1,100 catch-up contribution generally available for people age 50 and older.

There is also a new 2026 Roth catch-up requirement for certain higher-paid participants. For 2026, participants whose prior-year wages with the plan sponsor exceeded $150,000 generally must make applicable catch-up contributions on a Roth basis when the plan has a Roth feature.

Why Review Contributions Now?

If your savings rate is below your annual goal, you may still have several pay periods left to increase workplace-plan contributions.

Likewise, if your income increased or decreased, you may want to revisit whether traditional pre-tax or Roth contributions still fit your tax and retirement strategy.

Keep in mind that traditional IRA deductibility and Roth IRA contribution eligibility can be subject to income limits.

Mid-Year Tax Goal

Ask:

Am I contributing what I intended to contribute this year– and does the tax treatment still make sense based on my current income?

7. Track Deductions Before Receipts Disappear

Tax deductions are much easier to support when you organize the records as you go instead of trying to reconstruct an entire year next spring.

Depending on your circumstances, begin gathering records for:

• Charitable donations
• Medical expenses
• Mortgage interest
• Property taxes
• State and local taxes
• Certain sales taxes
• Other potentially deductible expenses

Medical Expenses

If you itemize deductions, qualified medical and dental expenses are generally deductible only to the extent they exceed 7.5% of adjusted gross income.

This is why a taxpayer expecting significant medical costs might want to discuss the timing of eligible expenses with a tax professional rather than simply assuming every medical bill will produce a deduction.

State and Local Sales Tax

Taxpayers who itemize generally choose between deducting:

• State and local income taxes, or
• State and local general sales taxes

You do not generally deduct both as separate categories. Certain major purchases can affect the sales-tax calculation when that method is used.

Charitable Contributions Have a New 2026 Opportunity

Beginning in tax year 2026, taxpayers who do not itemize may be able to deduct up to:

• $1,000 of qualifying cash charitable contributions, or
• $2,000 for married couples filing jointly

made to certain qualified organizations.

This makes charitable recordkeeping relevant to more taxpayers in 2026– not only people who expect to itemize.

Mid-Year Tax Goal

Organize receipts and contribution records now, and begin thinking about any significant expenses or charitable giving you expect before the end of the year.

8. Business Owners: Review the Numbers Before December

For business owners, a mid-year tax check-up can be particularly valuable.

Do not wait until tax season to find out whether your business had a much better– or worse– year than expected.

Review:

• Revenue year to date
• Profit and loss
• Major expense categories
• Mileage logs
• Vehicle use
• Home-office records
• Equipment purchases
• Software subscriptions
• Payroll
• Contractor payments
• Retirement-plan contributions
• Federal estimated payments
• State and local estimated payments, where applicable

Compare actual business results with:

• Your budget
• Your original annual projection
• The same period last year

Look Ahead to Planned Business Purchases

If you are considering a major equipment, technology, or vehicle purchase, discuss the timing and potential tax treatment before making the purchase.

Buying something solely because you believe it will “write off” income is not always good financial planning.

The tax treatment of business assets can depend on:

• Business use
• Type of asset
• When it is placed in service
• Depreciation rules
• Available elections
• Other facts specific to your business

The better question is:

Does the business need this purchase, and if so, is there a tax-efficient time and way to make it?

Review Your Estimated Taxes

A strong first half of the year may mean your original estimates are now too low.

A significant slowdown may mean your original estimates no longer match expected tax liability.

Mid-Year Tax Goal

Know approximately where the business is headed financially before the final months of the year begin.

That gives you time to plan instead of reacting after December 31.

9. Review Any Big Financial Moves

Some financial decisions can dramatically alter a tax return.

Before completing– or after completing– any major transaction, review its potential tax impact.

Examples include:

• Selling stocks or investments
• Selling a home
• Buying a home
• Selling rental property
• Taking a large retirement distribution
• Planning required minimum distributions
• Converting a traditional IRA to a Roth IRA
• Receiving Social Security benefits for the first time
• Starting pension distributions
• Receiving an inheritance
• Selling inherited property
• Receiving inherited retirement accounts

Roth Conversions

A Roth conversion can be a useful retirement-planning strategy in some circumstances, but the amount converted from a traditional IRA is generally included in taxable income to the extent it represents previously untaxed funds.

That means a conversion should generally be evaluated as part of your entire year’s income, rather than looked at in isolation.

A mid-year projection can help answer:

• How much taxable income do I expect this year?
• What marginal tax bracket am I currently in?
• Would a conversion push other income into a higher bracket?
• Could the additional income affect credits, Medicare premiums, or other income-based provisions?

Required Minimum Distributions

Taxpayers subject to required minimum distribution rules should also make sure distributions are on track before year-end.

For many current retirees subject to the newer rules, RMDs generally begin based on age 73, although the correct starting date depends on birth year and other circumstances.

Inheritances

An inheritance itself is generally not included in income in most cases.

However, inherited assets can later create taxable income, inherited retirement accounts may produce taxable distributions, and selling inherited property can generate a capital gain or loss based on the property’s tax basis.

So receiving an inheritance is still worth mentioning during your tax-planning review.

Mid-Year Tax Goal

Avoid making a large financial decision in isolation.

Look at how the transaction interacts with all of your other income and deductions for the year.

10. Track Credits and Deductions That Need Documentation

Some tax benefits are easier to identify when you begin collecting the records before tax season.

Review whether you need documentation for:

• College tuition and education expenses
• Childcare expenses
• HSA contributions
• FSA balances
• Retirement contributions
• IRA contributions
• Qualified charitable contributions
• New vehicle purchases
• Vehicle-loan interest
• Other credit- or deduction-related expenses

Financed New Vehicle Purchases for 2025–2028

A newer tax provision allows eligible taxpayers to deduct up to $10,000 per year of qualified passenger vehicle loan interest for tax years 2025 through 2028.

Requirements and limitations apply.

Among other rules:

• The loan generally must have been incurred after December 31, 2024
• It must be used to purchase a qualifying vehicle
• The vehicle’s original use must begin with the taxpayer
• The vehicle must have final assembly in the United States
• Income limitations apply

If you bought a qualifying new vehicle during the year, keep:

• The purchase agreement
• Loan documentation
• VIN
• Records of interest paid
• Documentation relating to final assembly when relevant

HSA Contributions

For 2026, the HSA contribution limit is $4,400 for self-only coverage and $8,750 for family coverage, subject to applicable eligibility rules and additional catch-up provisions.

A mid-year check helps determine whether you are contributing at the pace you intended.

Mid-Year Tax Goal

Identify any tax benefit that depends on documentation and make sure you are collecting that documentation now.

Mid-Year Tax Planning Opportunities to Discuss Before Year-End

Once you have completed the ten-part review, you can begin looking at possible planning opportunities.

Not every strategy will make sense for every taxpayer.

Depending on your financial situation, conversations with your tax and financial professionals might include:

Managing Taxable Income and Tax Brackets

Rather than simply trying to “get into a lower bracket,” consider whether there are legitimate opportunities to manage the timing of taxable income and deductions.

Your tax bracket is only one part of the calculation. Credits, capital gains, Medicare thresholds, Marketplace credits, retirement planning, and other factors can also be affected by income.

Roth Conversions

If your taxable income is unusually low this year– or you are planning a longer-term retirement strategy– a partial Roth conversion may be worth evaluating.

Remember that conversions generally create taxable income in the year of conversion.

Capital Gain and Loss Planning

If you have already realized investment gains, you may want to review unrealized investment losses with your financial advisor and tax professional.

Capital losses can potentially offset capital gains, subject to applicable rules.

However, the wash-sale rules can prevent an immediate loss deduction when substantially identical securities are repurchased within the applicable 30-day window before or after a loss sale.

Tax considerations should be one factor in an investment decision– not the only factor.

Charitable Planning

If you expect to make charitable contributions, planning before year-end gives you time to:

• Confirm that the organization is qualified
• Keep proper documentation
• Decide when to make the gift
• Consider whether cash or another type of giving strategy is appropriate

And beginning in 2026, even certain taxpayers who do not itemize may qualify for the new limited cash-contribution deduction.

S Corporation Election Planning

If your business is considering an S corporation election, do not assume it can simply be made at year-end and retroactively apply whenever you choose.

For a calendar-year business, a timely S corporation election for that year is generally due no later than 2 months and 15 days after the beginning of the tax year. Late-election relief may be available when specific requirements are satisfied.

By mid-year, it may therefore be more appropriate to:

• Review whether late-election relief is available, or
• Begin planning for an election effective the following tax year

This is an area to discuss with your tax professional before assuming S corporation status will automatically create tax savings.

Estimated Tax Adjustments

If your projected income has changed, recalculate the remaining estimated payments.

Do not continue paying the same amount simply because that was the number calculated at the beginning of the year.

Make Your Mid-Year Tax Check-Up Count Before December 31

A good mid-year tax review is not about trying to predict every number on next year’s tax return perfectly.

It is about asking the right questions while there is still time to act.

Has your income changed?

Is enough tax being withheld?

Are your estimated payments still appropriate?

Did your family situation change?

Does the Marketplace still have an accurate income estimate?

Are you on track with retirement contributions?

Have you made major investments, retirement withdrawals, or business purchases?

Are your records organized?

And most importantly:

Are there decisions you should make before the year ends rather than discovering their tax impact next spring?

A thoughtful mid-year tax check-up can help you:

• Reduce unpleasant tax surprises
• Make withholding adjustments sooner
• Keep estimated payments on track
• Identify missing documentation
• Prepare for credits and deductions
• Coordinate retirement and investment decisions
• Improve business tax planning
• Make more informed year-end financial decisions

At Matterhorn Tax Planning, we help individuals, families, retirees, and business owners review what has happened so far and look ahead to the rest of the tax year.

Contact Matterhorn Tax Planning to schedule a mid-year tax check-up and make sure your 2026 tax strategy is still on track before year-end.