February is the sweet spot for tax prep.
You're past the chaos of January, but you still have plenty of breathing room before the April deadline. This is when smart planning happens, not last-minute scrambling.
As financial advisors, we see taxes through a different lens than most. We're looking at how your tax situation connects to your overall financial plan, your retirement goals, and your long-term wealth strategy. We're not the ones preparing your return (more on that in a moment), but we can help you think about the bigger picture.
Here's your February checklist to get organized, avoid missing opportunities, and start this tax season on the right foot.
Start With the Disclaimer (Because It Matters)
Before we dive in, let's be crystal clear: Drumgoole Financial and our advisors are not tax professionals, CPAs, or enrolled agents. We don't prepare tax returns, and we can't give you specific tax advice for your individual situation.
What we can do is help you think strategically about how taxes fit into your broader financial plan, retirement savings, investment decisions, income planning, and wealth management.
Everything in this post is for educational purposes only. You'll need to work with a qualified tax professional to review your specific circumstances and prepare your return. Think of us as part of your financial team, working alongside your CPA to help you build a comprehensive plan.
Now, let's get to work.
Step 1: Gather Your Documents (Before They Pile Up)
Tax season starts with paperwork. Lots of it.
The good news? Most of your critical documents should arrive by the end of January or early February. The bad news? They come from different sources, at different times, and it's easy to lose track.
Here's what you're looking for:
Employment Income:
- W-2 forms from your employer(s)
- 1099-NEC or 1099-MISC if you did any contract or freelance work
Investment Income:
- 1099-DIV for dividends from your brokerage accounts
- 1099-INT for interest income
- 1099-B for sales of stocks, bonds, or mutual funds
- 1099s from LPL Financial or other investment platforms (these can take a few extra weeks to arrive, especially if there were late-year transactions)
Retirement Distributions:
- 1099-R if you took any distributions from an IRA, 401(k), or pension
Other Income:
- Social Security statements (SSA-1099)
- Rental income records
- Schedule K-1 forms from partnerships or S-corps (these often arrive later)
Create a physical folder or a dedicated digital folder. As documents arrive, drop them in immediately. This simple habit prevents the "where did I put that?" panic in March.
Step 2: Check Last Year's Retirement Contribution Limits
Here's something many people don't realize: you have until the tax filing deadline (usually mid-April) to make IRA or Roth IRA contributions for the previous tax year.
That means in February 2026, you can still contribute to your 2025 IRA, if you haven't maxed it out yet.
Why does this matter?
If you're eligible to deduct traditional IRA contributions, this is one of the last opportunities to lower your 2025 taxable income. Even if the year is already in the rearview mirror, you can still take action.
For Roth IRAs, while contributions aren't deductible, making them before the deadline ensures you're maximizing tax-free growth potential for retirement.
2025 contribution limits (that you can still fund until April 2026):
- $7,000 if you're under age 50
- $8,000 if you're 50 or older (includes $1,000 catch-up contribution)
Have a conversation with your tax professional about whether making a last-minute contribution makes sense for your situation. From a wealth management perspective, we're always looking for ways to maximize tax-advantaged growth, and this is a simple one that often gets overlooked.
Step 3: Review Life Changes From the Past Year
Taxes aren't just about income and deductions. They're about your life.
Did anything significant change for you in 2025? These changes can have a meaningful impact on your tax situation, and they're easy to forget about when you're focused on gathering 1099s.
Ask yourself:
Did you or your spouse retire? Retirement often means changes in income sources, Social Security decisions, and healthcare coverage (hello, Medicare). All of these ripple into your tax return.
Did you get married or divorced? Filing status changes everything, from your tax bracket to your eligibility for certain deductions and credits.
Did you have a baby or welcome a grandchild as a dependent? New dependents can open up credits and deductions you didn't qualify for before.
Did you buy or sell a home? Real estate transactions come with tax implications, from mortgage interest deductions to capital gains considerations.
Did you inherit money or assets? Depending on the type of inheritance, there may be tax consequences to consider.
Did you make major charitable contributions? If you donated significantly in 2025, make sure you have proper documentation for your deductions.
Your tax preparer needs to know about these changes. But more importantly, we need to know about them as we help you plan for the years ahead. Life changes don't just affect one tax return: they shape your entire financial strategy.
Step 4: Think Holistically (Our Job as Financial Advisors)
Here's where we come in.
Tax preparation is backward-looking. You're reporting what already happened. But wealth management is forward-looking: we're helping you make decisions today that minimize taxes tomorrow, next year, and throughout retirement.
When we look at your financial picture, taxes are just one piece of the puzzle. But they're woven throughout:
Retirement income planning: How much you withdraw from traditional IRAs versus Roth accounts versus taxable investments can dramatically impact your tax bill in retirement. We help you create a tax-efficient withdrawal strategy.
Investment decisions: Should you hold bonds in your IRA or your taxable brokerage account? When does tax-loss harvesting make sense? These aren't questions for April: they're ongoing strategic decisions.
Required Minimum Distributions (RMDs): Once you turn 73, the IRS requires you to start taking distributions from traditional retirement accounts. We help you plan for this years in advance, so you're not caught off guard by a big tax bill.
Social Security timing: When you claim Social Security affects how much of your benefit is taxable. This decision is too important to make in a vacuum.
Estate planning: Tax-efficient wealth transfer strategies can help you leave more to your heirs and less to the IRS.
This is what we mean by a holistic approach. We're not just looking at this year's return: we're building a long-term strategy that considers how all the pieces fit together.
And that requires collaboration. Your tax professional handles compliance and preparation. We handle strategy and planning. Together, we strive to help you keep more of what you've worked so hard to build.
What to Do Right Now
February is your window. Here's your action plan:
1. Set up your document collection system today. Folder, binder, cloud storage: whatever works for you. Just create it now before the forms start arriving.
2. Review your 2025 IRA contribution status. Did you max out? If not, talk to your tax professional about whether it makes sense to contribute before the April deadline.
3. Make a list of any major life changes from 2025. Write them down so you don't forget to mention them.
4. Schedule time with your tax preparer. Don't wait until March. Good tax professionals book up fast.
5. Reach out to us. If you want to discuss how your tax situation fits into your broader financial plan, we're here. This is exactly the kind of strategic conversation that makes a difference over the long term.
Tax season doesn't have to be stressful. With a little organization in February and the right team around you: a qualified tax professional to handle your return and a financial advisor to help with the bigger picture: you can turn tax time from a dreaded obligation into an opportunity for smart planning.
Remember: We're not your tax preparers, but we are your financial planning partners. Let's work together to make sure your tax strategy supports your life goals.
Have questions about how taxes fit into your retirement or investment plan? Let's talk. That's what we're here for.