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Mid Year Tax Check-In

May 13

Written By Eric Dauphin

Eric Dauphin

Tax Planning - Q3 Check-In

Key 2025 Tax Updates for Individuals

📋 Tax Planning · Q3 Check-In

By Eric Dauphin, CPA · September 2026 · 8 min read

Most people think about taxes in April, when the year is over and every number in it has already been decided. September is the opposite of that.

Eight months of 2026 are on the books — enough to see where the year is actually landing. And four months are still ahead of it, which is enough time to change the answer. That combination only exists for a few weeks a year, and it disappears quietly. By the second week of December, most of the useful moves have closed without anyone announcing it.

Here are the nine things worth settling this quarter. A few have hard deadlines attached. The rest simply get harder the longer they wait.

The nine, at a glance

Make the September 15 estimated payment
Review year-to-date income and withholding
Close out anything still on extension
Schedule a 2026 projection
Look at investment gains and losses
Check retirement contributions and charitable giving
Tell us about the big life changes
Business owners: compare year-to-date profitability to last year
Business owners: revisit owner compensation

1. Make the September 15 estimated payment

The third-quarter individual estimated payment is due September 15, with the fourth and final installment due January 15, 2027. If you own a pass-through business, this is your payment too — the income flows to your personal return, so the estimate does as well.

The part worth pausing on isn't the date. It's the amount. Most people set their quarterly estimates in April based on last year's return and never revisit them, which works fine in a year that resembles the last one. If 2026 hasn't — a strong first half, a new client, a property sale, a bonus, a side business that finally took off — then you're making a payment sized for a year you're no longer having.

Worth knowing: the safe harbor rules protect you from penalties, not from owing the money. You can pay in 100% of your 2025 tax (110% if your 2025 AGI was $150,000 or more), owe a great deal more in April, and still face no penalty. That's a legitimate strategy — but only if the cash is there in April. Deferring a tax bill and forgetting about a tax bill look identical until spring.

2. Review year-to-date income and withholding

Pull your most recent pay stub and look at the year-to-date federal and state withholding. Compare it against what your 2026 income is actually going to be, not what you assumed in January.

If you're short, there's a lever most people don't know exists. Withholding is generally treated as though it were paid evenly throughout the year, no matter when it actually came out. An estimated payment is credited when you make it; withholding is credited as if it had been arriving all along. That asymmetry is genuinely useful — increasing withholding on your remaining paychecks can reduce or eliminate an underpayment penalty for earlier quarters in a way that writing a larger check in January cannot.

It works in the other direction too. If your income arrived unevenly — most of it in one quarter, which is common with a business sale, a bonus, or a large capital gain — the annualized income installment method can reduce a penalty calculated on the assumption that you earned it evenly. It requires the detail to support it, so it's worth telling us now rather than at filing.

3. Close out anything still on extension

Extended 2025 partnership and S corporation returns were due September 15. Extended individual returns are due October 15, and extended calendar-year C corporation returns are due the same day.

If your return is still open, the remaining documents are usually the same short list: a K-1 you're waiting on, a brokerage statement, a closing document, a missing acknowledgment letter. Send what you have now rather than waiting to send everything at once. A return that arrives complete on October 10 gets a rushed review; the same return in pieces starting in September gets a real one.

And a reminder that catches people every year: an extension to file was never an extension to pay. If there's a balance due on the 2025 return, interest has been running since April regardless of the extension.

4. Schedule a 2026 projection

This is the one that makes the other eight useful. A projection takes your year-to-date numbers, adds a realistic estimate of the rest of the year, and tells you roughly where you'll land — taxable income, federal and New York liability, and how close you are to the edges that matter.

Those edges are the point. Being near the top of a bracket, near a phase-out for a credit or deduction, near a threshold that changes how an item is taxed — a few thousand dollars of timing can change what your last dollar costs. You can't act on any of it without knowing where you're standing first.

Eight months of real data is enough to do this with reasonable confidence. Twelve months of real data is a tax return.

5. Look at investment gains and losses

If you've realized gains this year, the offsetting losses in your portfolio are worth finding now, while there's time to be deliberate about it. Capital losses offset capital gains dollar for dollar, and up to $3,000 of net loss can offset ordinary income each year, with the remainder carrying forward indefinitely.

What to watch:

The wash sale rule. Buying the same or a substantially identical security within 30 days before or after the sale disallows the loss. The window runs both directions, which surprises people who bought more of a position on the way down.
Holding periods. A position sold a few weeks short of a year is taxed at ordinary rates instead of long-term capital gain rates. Sometimes waiting is worth far more than the price movement you're worried about.
Trade settlement and year-end. December sales need to actually settle. Don't leave a planned transaction to the last week of the year.
Mutual fund distributions. Funds distribute capital gains in November and December, and you owe tax on them whether or not you sold anything. Buying into a fund right before a distribution means buying a tax bill.

Loss harvesting is a tool, not a goal. Selling a good position to capture a deduction is usually the wrong trade. Coordinate this with whoever manages the portfolio.

6. Check retirement contributions and charitable giving

These are grouped together because they share a problem: both move your taxable income meaningfully, and both are constrained by the calendar in ways that aren't obvious.

Retirement

401(k) and 403(b) deferrals have to run through payroll by December 31. There's no catching up in April. If you want to maximize for 2026, the number of remaining pay periods determines whether it's still possible — which is exactly why September is the month to check.
IRA and Roth IRA contributions can be made until the April filing deadline, so those have runway.
HSA contributions also run until the filing deadline, and an HSA remains one of the few genuinely triple-advantaged accounts available.
SEP and solo 401(k) employer contributions can generally be funded up to the extended due date of the return, meaning the amount can be decided after you see the full year. The decision to have a plan at all, though, is a this-year decision.

Giving

Appreciated stock held more than a year is usually a better gift than cash — you generally deduct the full fair market value and avoid the capital gain entirely. Transfers take time to process, so November is late and December 28 is a gamble.
Donor-advised funds let you take the deduction this year and decide on the recipients later — useful in a year when income spiked.
Qualified charitable distributions from an IRA, available from age 70½, satisfy required distributions without adding the amount to income. For people who take the standard deduction, this is often better than writing a check.
Bunching. If your itemized deductions land just under the standard deduction most years, concentrating two years of giving into one can produce a deduction where two normal years produce none.

7. Tell us about the big life changes

This is the item with no deadline and the largest consequences. Every year, we learn about something at filing time that we could have planned around in September.

A marriage or a divorce — filing status is determined by your status on December 31, not by how most of the year looked.
A new child, or a child who aged out of a credit, or one who started college.
Buying or selling a home — the gain exclusion on a primary residence has ownership and use requirements that are worth confirming before you list, not after you close.
An inheritance — inherited assets generally receive a basis adjustment, which changes the math on selling them dramatically. Selling first and asking later is an expensive order of operations.
A job change — an old 401(k) to roll over, a severance payment, equity compensation that vested or needs a decision.
A move across state lines — part-year residency, and New York in particular applies a day-count test and looks closely at whether domicile actually changed. If you moved this year, or spend substantial time in two states, tell us now.

💼 If you own a business

8. Compare year-to-date profitability to last year

Pull your year-to-date profit and loss and put it next to the same window from 2025. A strong nine months is good news that arrives with a tax bill, and the estimates you set in the spring were sized for a different business.

Three situations, three responses. If you're tracking close to plan, confirm it and move on. If you're ahead, reset the remaining estimates now — otherwise you're choosing between a large April balance and an underpayment penalty. If you're behind, you may be overpaying estimates and tying up cash the business could be using, which is worth fixing while it's still working capital rather than a refund you wait until spring to collect.

This is also the moment to model any year-end equipment purchase rather than deciding in December. The test for a deduction is whether the asset is placed in service by December 31 — not when you ordered it or when you paid for it. And Section 179 can't create or increase a loss, so the deduction you're counting on may be capped by the income the business actually reports.

9. Revisit owner compensation

If you operate as an S corporation, the IRS expects reasonable compensation through W-2 wages before distributions. The line is genuinely gray; the consequences of getting it badly wrong are not.

What makes this a September item rather than a December one is mechanical: distributions can be timed flexibly, and payroll cannot. Wages have to actually run through payroll before December 31. A correction attempted on the last payroll of the year is a large, conspicuous adjustment. The same correction spread across the remaining months of the year is ordinary.

Worth checking: whether your salary still fits the role you perform and the revenue the business now generates, whether it's been reset since the business grew, and whether the ratio of distributions to salary has drifted into the pattern that draws attention.

One more for New York pass-through owners: if you're participating in the state's pass-through entity tax, the timing of those payments affects when the federal deduction lands. It's worth confirming where you stand before year-end rather than after.

The rule underneath all nine

If you take one thing from this list, take this: call us before the big moves, not after.

A sale, a large purchase, an early retirement withdrawal, a distribution, a new entity, a property transaction. In almost every case the tax result is decided by how the thing is structured and when it happens — and both of those are settled by the time you tell us about it. The conversation that takes fifteen minutes beforehand routinely turns into a number we can only report afterward.

September is the month with the most room in it. We're not competing with April deadlines, you're not out of options yet, and there's enough of the year on the books to say something useful about where it's going.

Ready to see where 2026 lands?

We'll run your projection and walk through anything on this list that raised an eyebrow.

Schedule Your Check-In →

Eric Dauphin is a principal at Dauphin & Fantacone CPAs, a Syracuse-area firm serving business owners, professionals, and families across New York State. This article is for general informational purposes and does not constitute tax or legal advice. Contribution limits, thresholds, and deadlines change, and tax outcomes depend on individual circumstances — please contact us before acting on any of the above.

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