Six Surprising Things You Should Check at Tax Time

Frank Summers |

It’s tax time. Like everyone, I’m preparing my documents and getting organized. Note: tax forms for investment accounts are due to be mailed by February 15.  

While I don’t enjoy paying taxes (who does?), I do enjoy the feeling of knowing that I’ve looked at all of my important accounts and documents, and I can make adjustments if I need to. Here are six things that should be checked at tax time. 

Your Social Security account The Social Security Administration used to mail workers annual statements. That stopped in 2011. Today, paper statements are mailed only to individuals ages 60 and up with no online account. You should check your estimated future benefits and your reported annual earnings every year. Checking annual earnings is often overlooked. There is potential for mistake or fraud, and it’s important to identify that as soon as possible. Your Social Security benefit is based on your 35 highest earning years. If there is a misstatement of earnings for a particular year, it needs to be challenged and fixed as soon as possible. If you find an error 10 years or 15 years or later after it happened, you may not have the records to prove that you actually earned more than what was reported. If you have no records, and you cannot prove your earnings, it may impact your overall benefit. Check this annually at 

Your 401K accounts Most people with 401(k) accounts are able to check their accounts through their employer’s website, however many people have switched employers and still have accounts with a former employer. For those people, it is especially important that you check those accounts. Especially check any transactions to see if someone has fraudulently accessed the account and withdrawn funds. Also, review the allocation of funds. Rebalancing or reallocating your account is a key investment management tactic and should be done when your account no longer aligns to your comfort with risk. Unsure of whether the allocation is right for you? Download a copy of the allocations and send it to me.

Beneficiaries on ALL accounts Speaking of 401(k)s, ALL account beneficiaries should be reviewed, especially on older accounts that haven’t been reviewed in a long time. There are many accounts that still list a former spouse as beneficiary, even though that’s not the person we’d like to receive assets today. If someone has divorced and remarried, and their old account lists their former spouse as beneficiary, that can get very messy, really fast. 

Legal documents Wills, trusts, powers of attorney and health instructions, etc. should be reviewed with an attorney every 3-5 years. Your life may have enough changes in that time that there need to be adjustments. There will also likely be changes in state laws, or in the forms themselves. There may be some unexpected changes that you may not realize would be impacted, but an attorney might recognize as something to consider. Those important documents should change along with the changes in your life.

Your credit report Check your credit report for any reported items, such as late payments, closed accounts, or other reported items. You never know when you may need to access credit, and a mistake on a credit report is not something you want to try to fix at the time that you need to open/use a credit account. Those kinds of items can reduce your credit score, and that can mean higher interest rates and payments. Also, check to see who has been looking at your credit report. You may want to consider freezing your credit, to ensure no one can open an account or credit line without your explicit consent.

Your life situation – What’s changed? Are there new family members, or have people passed away? Have kids grown and moved out of the house? Have you decided you’d like to retire earlier than planned? Has your health changed? Has the pandemic caused you to rethink what’s important? What will change as a result of that? Will you move? Change jobs? Something else?

Each of these six things might have an impact on your financial plan, or you may simply need help in addressing them. If your Social Security Estimated Benefit changes, then your retirement goal plan should be updated, which may increase or reduce the amount you need to save to meet your retirement savings goals. If your life situation has changed, that too, may impact your goals, leading to changes in your financial plan. If you’re unsure of whether your 401(k) accounts are aligned to your preferences, or if you have multiple accounts and would like to consolidate them, then that should be considered. 

I’m here to help you. In any of these situations, we should talk. We can schedule time by clicking here or by phone at 704-717-8900 Ext. 115.