SPECIAL EVENT
Luminary Tax Advisors presents
Feeling Taxed?
What You Need to Know
Before the 2026 Tax Season Hits
10 Healthy Tax Habits
A smarter, calmer approach to the most important financial chore you do every year
Let’s reframe taxes for a moment: Outside of buying a home, you’ll likely spend more money on taxes than on anything else in your life. And yet, it’s often treated like a one-and-done chore due April 15 instead of what it actually is: the single most important financial document you complete every year.
If you’re thinking about your health in 2026—financial or otherwise—these are 10 habits that can help you stay steady, avoid unnecessary stress, and make better decisions all year long.
1. Don’t DIY Your Taxes
For something this important, “I’ll just do it myself” is a risky mindset.
About 50% of self-filed tax returns are incorrect. And here’s the kicker:
- If you owe money because of a mistake, the IRS will absolutely let you know.
- If you overpaid and left money on the table? You’ll probably never hear about it.
Your tax return isn’t just paperwork; it’s the foundation for financial planning, borrowing, investing, and long-term security. Trusting it to a professional is often a small price to pay for peace of mind and accuracy.
2. Don’t Fear Tax Time. Use It!
People who are truly successful don’t fear tax season; they embrace it.
Your tax return is a recap of your entire year: income, investments, debt, insurance, retirement, business activity, and more. It’s not just a bureaucratic requirement—it’s a diagnostic tool and a knowledge check. Do you actually know how much you made? Where it came from? Where it went?
If you’ve never worked with professionals like us before, tax time can also be a powerful learning moment. Understanding how your return is built, and why certain numbers matter, can sharpen your financial awareness and improve your decision-making all year long.
You may never get excited about filing, but reviewing your taxes should feel like a reset and a launching point for what’s next.
3. A Big Refund Isn’t Always Healthy
Most people love a big tax refund. From a planning perspective? It’s not great.
Here’s a quick mindset check: would you be thrilled about a $5,000 refund from the IRS… if it meant you loaned them $5,000 interest-free all year?
Because that’s exactly what’s happening.
A large refund means you overpaid throughout the year—money that could have been working for you instead. If someone asked to borrow thousands of dollars and promised to pay it back 16 months later with no interest, you’d probably say no. Yet many taxpayers do this every year without realizing it.
With changes from the One Big Beautiful Bill, many people will see higher refunds this year. Rather than celebrating, consider using it as an opportunity to:
- Adjust your withholding
- Improve cash flow throughout the year
- Put more money into each paycheck instead of waiting until April
A “smaller” refund often means a healthier financial strategy—and more control over your money year-round.
4. A Big Tax Bill Can Be a Problem Too
Owing money in April isn’t the issue. Owing penalties because you underpaid all year is.
Those quarterly estimated payments your software or tax pro set up for you? Ignoring them can cost you roughly 7% in penalties, and that adds up quickly. Good tax planning helps you avoid unnecessary interest and stay compliant without overpaying.
There’s also an important distinction here. If most or all of your household income is W-2 income, you generally shouldn’t owe a substantial amount at filing time. A large balance due often means your W-4 isn’t set up correctly, and the right amount isn’t being withheld from your paycheck.
The fix isn’t panic—it’s precision. Adjusting withholding or estimated payments during the year keeps surprises (and penalties) off the table and your cash flow predictable.
5. Think of Tax Planning Like Preventive Care
Waiting until April to think about taxes is like seeing a doctor only when something hurts.
Healthy finances require regular check-ins, not emergency visits. Mid-year reviews, withholding adjustments, and proactive planning help you:
- Avoid penalties
- Improve cash flow
- Make smarter decisions before it’s too late to fix them
Preventive care works for your body and your taxes.
6. Your Health Insurance Affects Your Taxes More Than You Think
Health insurance costs are rising, and the tax implications are often misunderstood.
Depending on your situation, you could be:
- Missing out on HSA contributions
- Paying more than necessary for Marketplace coverage
- Losing tax benefits simply because the rules weren’t explained clearly
This is one area where guessing can quietly cost you hundreds or thousands of dollars.
It’s also a moving target. Health insurance and tax policy are actively being debated, and changes can happen mid-year or even during tax season. What applied last year may not fully apply this year or next.
That’s why this isn’t a “set it and forget it” decision. Reviewing your coverage with a professional helps ensure you’re maximizing benefits today while staying adaptable as the rules evolve.
7. Retirement Saving Needs a Strategy, Not Just a Contribution
Putting money into retirement is one of the most effective ways to reduce taxes—but it isn’t automatically the healthiest move in every situation.
There’s no one-size-fits-all retirement plan. A good strategy considers:
- Current vs. future tax rates
- When and how you’ll access the money
- How withdrawals will be taxed later
But it also considers life.
If your choice is between maxing out a retirement account or being able to buy the dress you want to wear to your daughter’s wedding, retirement suddenly feels less urgent, and that doesn’t make you irresponsible. It makes you human.
Some diversions from retirement are one-time moments. Others are long-term decisions. The key isn’t avoiding them, it’s making them intentionally, with an understanding of how they fit into your broader financial picture.
Saving is good. Saving with intention—and in alignment with your goals—is better.
8. “We’ll Figure It Out Later” Is Not an Estate Plan
Planning to die and letting your family sort out the taxes is a terrible plan.
Retirees often have relatively simple tax returns, but tax strategy matters more than ever at this stage. Decisions around Social Security timing, retirement withdrawals, charitable giving, and estate planning can dramatically impact how much your family keeps.
This is where a Luminary Tax Advisor adds the most value.
9. Know When—and When Not—to File
Filing early isn’t always the smartest move.
Sometimes it makes sense to:
- Wait to fund an IRA or HSA
- Finalize business depreciation decisions
- File an extension to allow time for thoughtful planning
And yes…extensions are healthy and normal. They don’t increase audit risk, and they give you breathing room to make informed decisions instead of rushed ones.
What’s not healthy? Calling an accountant on April 13 and expecting magic.
The goal isn’t speed. It’s filing at the right time, with the right information, and a plan that actually serves you.
10. Protect Your Identity and Your Information
Two simple steps can dramatically reduce risk:
- Get an IP PIN. This six-digit number prevents anyone else from filing a return in your name and reduces the risk of tax-related identity theft by more than 90%.
- Create an IRS.gov account. Reviewing your transcripts and Wage & Income reports each year helps you spot errors or fraud early, before they snowball.
Think of these as basic financial hygiene.
And the stakes are real. In 2024 alone, the IRS flagged and suspended processing on nearly 1.9 million tax returns due to fraud concerns. In 2023, more than 12,000 fraudulent returns slipped through, resulting in over $100 million in illegal refunds.
For taxpayers whose returns are flagged, the average wait time to resolve the issue and receive a refund is currently close to two years.
Most of these situations are preventable. A few proactive steps now can save months—or years—of frustration later.
The Bottom Line
If you think your taxes are “simple,” you’re probably not looking closely enough.
Healthy tax habits aren’t about shortcuts or chasing refunds—they’re about clarity, planning, and informed decisions. And while good advice may feel expensive upfront, cheap or generic advice often costs far more in the long run.
Or, as the saying goes:
Cheap tax prep is like cheap dental work; you only save money if nothing goes wrong.
Here’s to a healthier, smarter tax year in 2026.