Skip to Content
Parents camping with their two children symbolizing that they have a lot of financial planning to prepare for in the future
Planning your financial future

Make tax season your planning season

Taxes have a huge impact on a family budget, so tax time is a good opportunity to make a checklist and evaluate the condition of your financial plan.

Tax time is a good time to evaluate your finances and think about how you can improve your financial picture. After all, taxes can have a big impact on the family budget! Whether you're paying or getting a refund, getting proactive is a good idea. Use the checklist below for an annual tax-time tune-up.

1. Do your IRS withholdings need adjustment?

If you're an employee and you owe taxes this year, you may want to talk to your employer about upping your federal withholdings. Even if you're struggling to make ends meet, it's easier to sacrifice a small amount on every paycheck than it is to scrape up a big payment once a year. Likewise, if you're getting a big refund, you may want to adjust your withholdings down, so you don't have to wait until tax time to enjoy that extra money. You can make this adjustment by giving your employer a new W-4. Not sure how much to withhold? Here's a calculator that will walk you through - and here are the instructions.

2. Are you contributing to a traditional or Roth IRA?

What's the difference? A traditional IRA (individual retirement account) lets you contribute money to your retirement fund before taxes, making your total taxable income smaller. That lower the tax you'll owe next year. It can also build your retirement savings more quickly.

A Roth IRA is for your after-tax dollars. The idea is that if you pay taxes on your money now, you won't have to do so later when you're ready to withdraw your funds. Which IRA is right for you? Experts usually advise that a traditional account is good if you want to build fast and you expect to get into a lower tax bracket after you retire. The Roth account is good if you want more flexibility to withdraw your funds. Money placed in a Roth IRA can be used for emergencies, college funding or retirement funding. Just be aware that there are income limitations that can prevent higher income individuals from contributing and early distribution penalties.

3. Are you using a health savings account or a flexible spending account?

A health savings account (HSA) is another savings account for your pre-tax dollars. As with a traditional IRA, your HSA contributions make your taxable income smaller. But unlike an IRA, as long as you use the money for health-related expenses, you don't have to pay taxes on it.

Consider creating an HSA if you have an insurance plan with a high deductible, and you want to put aside money for health care down the road. Not sure if a HSA is right for you? Here's a good intro. While you're at it, consider starting a flexible spending account (FSA) too. These work similarly to HSAs, but you can put them toward different uses.

4. Can you increase your charitable donations?

Do you contribute to a charity or other nonprofits? There are many causes to choose from. Donations not only further a mission you care about; they can also lower your taxable income. If you're on the edge of your tax bracket, it's possible a donation could knock you onto a lower rung, potentially saving you more than it costs.

5. Is it time to refinance your home?

Sometimes refinancing can hurt your tax picture; sometimes it can help. It depends on the finer details of your situation. Here's an article to help you determine whether or not it's a good time for you to refinance.

There are many ways to save money and positively impact your family budget. Hopefully, you find these budget 101 tips helpful as you navigate your family's financial future.



Arrows linking indicating relationship

Related Articles

Several twenty-something couples laughing and hanging out with girlfriends hugging boyfriends’ necks.

How to manage money in your 20s

Learn more
Dark haired woman sitting at a table browsing her laptop.

Financial management: 3 safer savings alternatives

Learn more
Dad bowing to his young daughter who is dressed in a ballet tutu and ready to dance.

10 money management lessons from dad

Learn more

All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.