Fewer Tax Surprises and Red Squirrels
The Flying Point Update is coming to you a few days later than usual - I wanted to wait until the extension deadline passed yesterday to share some thoughts while they're still fresh. In this edition we'll talk about taking stress out of tax season, setting up online tax accounts, and red squirrels.
Top of Mind
Yesterday was the 2024 tax extension deadline, which officially closes the books on the 2024 tax season. The push of the last few weeks always has me thinking about the same question: why does something so predictable still create so much unnecessary stress?
The real issue is timing. There's a fundamental misunderstanding about when tax planning actually happens versus when tax preparation happens.
Tax planning happens while the year is still unfolding - that's when the levers exist. You can adjust withholdings, make retirement contributions, time income and expenses, implement new strategies, or restructure aspects of your business. These are the months when we have options and flexibility.
It's worth noting that not everyone needs intensive tax planning. "Tax planning" has become something of a buzzword in accounting, but the reality is more nuanced. If you're a W-2 employee with straightforward finances, your withholding is probably handling things well. Tax planning becomes more valuable when you have business income, significant investment activity, real estate, or major life changes. The complexity of your situation determines how much proactive planning makes sense.
Tax preparation is the work that happens after the calendar year ends. By the time you're organizing receipts and filling out forms, the numbers are largely set. We can maximize every deduction you're entitled to, but we're working with what already occurred. There aren't magic levers to pull that make taxes disappear after the fact. October's extension deadline adds another layer of pressure - unlike April when you can file an extension, October is the end of the line. After that, penalties start accumulating.
Right now, with extension deadline behind us, is a good time to get ahead of 2025. We still have two and a half months to pull levers and make adjustments. You don't need an oracle to predict your 2025 tax bill - we can look at the numbers now and have a clear sense of what's coming, rather than discovering it next April.
So how do we take the pressure out? Small, consistent actions throughout the year - organized recordkeeping, mid-year check-ins, proactive communication when things change. That's what shifts taxes from something that happens to you once a year to something you manage proactively. The goal isn't perfection. It's progress.
Worth Knowing
Here's a concrete first step you can take right now: set up your online IRS and state tax accounts if you haven't already.
The IRS has been steadily moving away from processing paper checks, and many states are following suit. More importantly, having online access to your tax accounts provides valuable information throughout the year and makes tax season significantly smoother.
For your IRS account, go to IRS.gov and create an account through their ID.me system. Yes, the verification process is a bit tedious, but once it's set up you can:
View your tax transcripts instantly instead of waiting weeks for mail
Make estimated tax payments electronically
Set up payment plans if needed
View your payment history and any outstanding balances
Access prior year returns
For Maine taxes, visit the Maine Revenue Services website and create a Tax Portal account. This allows you to:
File returns electronically
Make estimated payments
View your account history
Manage correspondence with the state
Most other states have something fairly similar to Maine’s setup.
The beauty of doing this now, in mid-October when there's no deadline pressure, is that you're setting yourself up for success. Identity verification issues that are merely annoying today become insanely frustrating under an April deadline. Get it done now, and when you need to check something or make a payment next year, everything is ready to go.
This is the proactive planning mindset in action - 30 minutes now saves hours of frustration later.
Mark Your Calendar
January 15th, 2026: Q4 2025 estimated tax payments due. Yes, even though it's technically for Q4 of 2025, the payment isn't due until January 2026.
January 31st, 2026: Deadline for businesses to issue W-2s and 1099s to employees and contractors.
I probably sound a bit like a broken record on this point, but now is also an excellent time to schedule year-end tax planning conversations. We still have two and a half months left in 2025, which means we still have time to implement strategies that will affect this year's taxes. But that window closes fast.
Maine Wildlife Facts
We have tons of red squirrels that live near our house, and Will and Frank have been fascinated watching them scurry about gathering food for winter. It’s also pretty funny to watch them mess with our two dogs.
These industrious little animals create structures called "middens" - enormous piles of pine cone scales and cached food that can grow to 30 feet across and several feet deep. What's remarkable is that these middens are built up over generations. A single red squirrel will cache thousands of pine cones in a season, but they don't do it in a panic as winter approaches. Throughout the fall, they work steadily and consistently - a little bit each day, building their stores gradually.
Unlike gray squirrels who scatter-cache (hide food randomly everywhere and often forget where they put it), red squirrels concentrate their stores and actively manage their inventory. They know exactly what they have and where it is, because they've been organized about it from the beginning.
If red squirrels waited until the first snowfall to start gathering, they wouldn't survive winter. But because they plan ahead and work consistently rather than frantically, they thrive. They're basically the CPAs of the forest - and they definitely don't wait until the last minute.
These Maine wildlife facts have been brought to you by Will (7) and Frank (3), Flying Point Advisors' on-staff naturalists.
Questions about any of this? Just reach out - I read every email and love hearing from you. Thanks for reading. You'll hear from me again in about two weeks.
-Mike
Disclaimer
The Flying Point Update is provided for general educational and informational purposes only. The content in this newsletter reflects my thoughts and observations on tax, accounting, and financial planning topics, but should not be considered personalized tax, accounting, or investment advice for your specific situation.
Tax laws are complex and change frequently. The information presented here is based on current tax law as of the publication date and represents general concepts that may not apply to your circumstances. Every individual and business has unique factors that affect their optimal tax and financial planning strategies.
Before making any financial decisions or implementing any tax strategies discussed in this newsletter, please consult with a qualified tax professional, CPA, or financial advisor who can evaluate your specific situation. If you'd like to discuss how any of these topics might apply to your circumstances, I'm always happy to chat.