Tax Planning Opportunities Hidden in Your Tax Return

What’s included:

• Why reviewing your tax return matters from a financial planning lens
• Tax planning opportunities to look for on your tax return
  • Missed retirement contribution opportunities
  • Capital gains and loss planning
  • Tax‑efficient charitable giving considerations
  • Withholding and tax payment review
  • Income and tax bracket awareness
  • Health Savings Account planning opportunities
• How these tax planning opportunities work together
• What to do next after your tax return is filed

Filing your tax return is more than just a task to check off your to-do list each year. When reviewed through a financial planning lens, your tax return can offer valuable insight into your overall financial picture and help reveal meaningful planning decisions for the year ahead. 

Why Reviewing Your Tax Return Matters

Your tax return provides a snapshot of your income, your savings habits, and your overall tax picture. Reviewing it can help uncover missed opportunities that are easy to overlook when filing it and moving on.

Although our team does not prepare tax returns, we do review them as part of your broader financial plan to: 

• Identify potential tax‑saving opportunities
• Spot errors or inconsistencies that may be worth discussing with your CPA
• Prepare more thoroughly for our conversations
• Provide you with more comprehensive, personalized guidance

Tax Planning Opportunities to Look For on Your Tax Return

We asked Affiance’s Financial Planning Department what opportunities are most often uncovered during a tax return review. Here are their answers:

Missed Retirement Contribution Opportunities

Contributed by Kyle Berg, CFP®, BFA™ | Partner, Financial Planner

A tax return can show where retirement savings opportunities may have been left on the table. Reviewing W‑2 wages helps confirm whether there is earned income that could support IRA or Roth IRA contributions. Checking Schedule 1 can show us if any deductible traditional IRA contributions were taken. If neither appears, that is often a sign that no retirement contribution was made for the year. 

We can also review Box 12 on the W‑2 to see how much went into a 401(k), 403(b), or SIMPLE IRA plan and compare that to the annual limits. For married couples, the return may also reveal whether a spousal IRA contribution was possible. If a client is age 50 or older, we can see if catch‑up contributions were missed.

Tax returns tie income and savings behavior together in one place. It can quickly show whether someone still qualifies for a deductible IRA, a Roth IRA, or catch‑up contributions. It also highlights situations where workplace plans are underused or where income levels do not quite match the current savings strategy. Fixing these gaps can have a significant long‑term impact, since retirement contributions grow over time and missed years are hard to replace.

Capital Gains and Loss Planning

Contributed by Chris Johnson, CFP® | Partner, Financial Planner

Reviewing capital gains and losses is an important step in understanding how investment decisions affect the overall tax picture. Schedule D and its associated worksheets provide a detailed map of how these gains and losses are calculated, categorized, and ultimately taxed. This section of the tax return captures sales of assets such as stocks, bonds, real estate, and collectibles, along with any capital loss carryforwards from prior years. A review of this section helps clarify how different types of gains are treated for tax purposes and whether losses are being fully utilized or carried forward. It also provides visibility into how these elements work together and whether there are opportunities for more efficient tax management.

Proactively managing capital gains and losses allows for more intentional decision-making around the timing and recognition of taxable events. This review can lead to strategies such as harvesting losses during market volatility, accelerating gains in lower‑income years, timing asset sales more thoughtfully, or holding positions longer to take advantage of more favorable tax treatment. When coordinated with income levels and broader financial goals, capital gains planning can help turn routine tax reporting into meaningful savings over time.

Tax‑Efficient Charitable Giving Considerations 

Contributed by Lucas Warner, FPQP® | Lead Financial Paraplanner

Reviewing your tax return for charitable giving opportunities can provide clear signals to understand whether your donations are creating a tax benefit. First, we can check whether you are taking the standard deduction or itemizing deductions. If you itemize, Schedule A shows your charitable contributions and helps confirm that your giving is being captured on the return. We can also review the amount and consistency of charitable gifts to see whether your giving aligns with what is being reported. Finally, looking at retirement distributions reported on Form 1040, especially IRA distributions and the taxable amount, may indicate required minimum distributions and potential planning opportunities, including Qualified Charitable Distributions (QCDs) for eligible individuals.

This review is important to help ensure households who give generously are seeing the impact on their tax return as intended. Focusing on strategies that help connect charitable intent to tax efficiency, particularly for clients who are eligible for QCDs, is an important step in the financial planning process. A QCD can allow IRA dollars to go directly to a qualified charity (501(c)(3)), reducing taxable income by keeping that amount out of adjusted gross income, which can also improve other tax-related outcomes. The goal is to align your giving with current tax guidelines so you can support the causes you care about while improving your overall after-tax outcome and, in some cases, reducing your tax liability.

Withholding and Tax Payment Review

Contributed by Bekah Peterson | Associate Financial Planner

A thoughtful review of withholding and tax payments is about more than checking boxes. It’s about understanding the full picture of your financial life. When we review a tax return, we examine total tax liability alongside federal and state withholding, estimated tax payments, and any underpayment penalties. We also look closely at where withholdings are coming from, including wages, retirement distributions, and Social Security benefits. These details often reveal planning gaps that may not be obvious during the year, but can become very clear once everything is summarized on the return.

This approach matters because tax returns may highlight recurring issues, such as unexpected balances due, avoidable penalties, or refunds that are far larger than necessary. Instead of reacting at filing time, these insights can help you better align your tax payments throughout the year. The result can lead to improved cash flow, fewer surprises, and a tax strategy that supports long-term financial planning, rather than working against it.

As you review your tax return, here are some specific things to look for that often signal an opportunity for improvement:

• A larger-than-expected balance due when you filed, especially if it created stress or required dipping into savings
• Underpayment penalties or interest, which may indicate taxes weren’t paid evenly during the year
• A very large refund, suggesting you may be over-withholding and missing opportunities to use that cash more intentionally
• Little or no withholding on retirement income, such as IRA distributions, pensions, or Social Security benefits
• Estimated tax payments that feel inconsistent or unclear, particularly if income fluctuates or has changed recently

If any of these show up on your return, it may be a sign that your tax strategy is not fully aligned with your financial life. 

Income and Tax Bracket Awareness

Contributed by Marc Usem | Partner, Financial Planner and Chief Investment Officer

Tax bracket awareness is a critical component of an effective tax return review. Understanding how close income is to key tax bracket thresholds can reveal valuable tax planning opportunities. In many cases, this analysis is more impactful for forward-looking planning than for reviewing prior-year returns. Certain years create unique planning windows due to income fluctuations. For example, in higher-income years, it may be possible to manage taxable income by delaying a portion of income into the following year or by maximizing pre-tax retirement savings contributions to remain in a lower tax bracket. Charitable giving strategies may also provide meaningful tax savings, particularly when modeled through techniques such as bunching contributions or making gifts to a donor-advised fund.

Conversely, accelerating income can be advantageous during periods of lower taxable income. This strategy is most common in the years between retirement and the commencement of Social Security benefits or required minimum distributions (RMDs). Lower-income years can also create opportunities for tax-sensitive strategies such as Roth IRA conversions, qualified charitable distributions, or tax gain harvesting. For individuals over age 65, monitoring Medicare income-related thresholds may help avoid unexpected premium increases and identify additional planning opportunities. Overall, reviewing forecasted income can be a powerful tool for tax optimization.

Health Savings Account Planning Opportunities 

Contributed by Marcia Zappa | Partner, Director of Marketing & Business Development

Health Savings Accounts (HSAs) are an important part of tax planning because of the unique triple tax advantages they offer. HSAs allow tax-free contributions, as well as tax-free growth and withdrawals for qualified medical expenses. Because of these tax benefits, HSA activity must be reported to the IRS via Form 8889. A thorough review of your tax return is one way to ensure that you are making full use of this tax-planning vehicle. By reviewing your tax return, a financial planner can find information about your HSA contributions, withdrawals, what portion of your withdrawals were spent on qualified medical expenses, and what portion, if any, were subject to taxes and penalties.

Reviewing the HSA information on your tax return can illuminate several financial planning opportunities. First, you may discover that you are under-funding your HSA. For 2026, the maximum contribution is $4,400 for individuals, $8,750 for families, with an additional $1,000 “catch-up” contribution for individuals age 55 or older. When cash flow allows, it is often optimal to make the maximum contribution because of the triple tax benefits mentioned above. 

Another opportunity that may reveal itself through a tax return review is optimizing the investments within your HSA. Specific investment information isn’t reported on Form 8889, but reviewing your HSA contributions and withdrawals often leads to a conversation about how your HSA is invested. As with your other investment accounts, it’s important to ensure the funds in your HSA are invested in alignment with your time horizon and risk tolerance. This is particularly important early on, allowing you to take advantage of the power of compounding, and later in your financial journey, to ensure your HSA funds are available when needed. 

Finally, if you want to take full advantage of your HSA’s tax-saving opportunities, you will want to consider a strategy of paying cash for medical expenses today, and reimbursing yourself from your HSA in the future, as described here. Reviewing the withdrawals on your tax return can help you evaluate if this strategy might make sense for you.

How These Tax Planning Opportunities Work Together

Together, these tax planning opportunities can tell a broader story. No single line item should be viewed in isolation. The real value comes from reviewing the entire return alongside your personal financial goals. In many cases, these items may be less about immediate action and more about signaling where deeper planning conversations with your financial planner may be helpful. 

 

Next Steps: How to Use Your Tax Return as a Financial Planning Tool

So what’s next? Share a copy of your completed tax return with your financial planner. This review should happen each year after your return is finalized, not just as a one-time task.

Financial planning is an ongoing process, and your tax return plays an important role beyond tax season. Reviewing it annually helps keep planning strategies aligned with your goals as your financial situation evolves.

If you have questions or would like help getting started, consider partnering with a financial planner. A proactive review can turn your tax return into a meaningful planning tool for the year ahead.