Tax season has a way of sneaking up on us each year. Whether you prepare your own return or work with a tax professional, a little preparation can make the process much smoother and may even help you uncover opportunities to reduce your tax bill.
Here are a few steps to help you get organized and prepared before filing your return.
1. Get Organized and Know the Deadlines
The federal tax filing deadline is typically April 15. If you need additional time, you can request a filing extension until October 15. However, it’s important to understand that an extension provides more time to file, not more time to pay your tax obligation. If you expect to owe taxes, you should pay your estimated amount by the April filing deadline to avoid potential penalties and interest.
One of the best ways to reduce tax season stress is to start organizing your documents early. Create a checklist of the forms and documents you expect to receive, such as W-2s, 1099s, charitable donation receipts, mortgage interest statements, and other relevant tax documents. As these forms arrive, you can add them to your records and keep everything in one place.
Consider maintaining a dedicated tax folder (either physical or digital) to store your checklist and documents throughout the year. Keeping your materials organized will make tax preparation much more efficient each year and help ensure nothing is overlooked.
2. Understand How Tax Law Changes May Affect You
Tax laws change frequently, and even small updates can affect what information you need to provide to your tax preparer.
Depending on your situation, changes could impact areas such as:
- Investment income reporting
- Retirement contributions and distributions
- Credits and deductions available to you
- Business income reporting for self-employed individuals
One notable change from recent tax legislation is a temporary increase to the State and Local Tax (SALT) deduction cap, which rose from $10,000 to $40,000 beginning in 2025, though it phases out for higher-income taxpayers (generally above $500,000 AGI). This may significantly impact itemized deduction planning for some high-income households.
There are also several retirement savings changes that individuals should be aware of. Beginning in 2026, individuals between the ages of 60 and 63 will be eligible for higher “super catch-up” contributions to certain employer retirement plans, allowing them to contribute additional funds on a tax-advantaged basis as they approach retirement, up to $11,250 in 2026.
In addition, new legislation introduced “Trump Accounts,” a type of tax-advantaged savings account designed to encourage long-term savings for children. For children born between 2025 and 2028, the federal government will provide an automatic $1,000 deposit into the account at birth. Families may be able to make additional contributions over time, allowing the funds to grow on a tax-advantaged basis until the child reaches adulthood.
Working with a knowledgeable tax professional and financial advisor can help ensure you’re providing the right documentation and taking advantage of any available planning opportunities.
3. Don’t Overlook Less Obvious Deductions
Many taxpayers are familiar with common deductions like mortgage interest or charitable donations, but there may be additional opportunities that are easy to miss.
For example, you may qualify for deductions or credits related to:
- Energy-efficient home improvements, such as solar panels, heat pumps, or energy-efficient windows
- Home office deductions if you are self-employed and use part of your home exclusively for business
- Education-related expenses or professional development
- Gambling losses
- Certain medical expenses that exceed income thresholds
Every tax situation is unique, so it’s important to keep good records and discuss potential deductions with your tax professional.
4. Start Planning for Next Year Now
While tax season focuses on reporting the previous year’s income, it is also a great time to look ahead and be proactive.
If your financial situation will change in the coming year or if you had any big surprises on your tax return, you may need to adjust your quarterly estimated tax payments to avoid underpayment penalties. Changes that could impact your tax picture include:
- A new job, promotion, or business income
- Significant investment gains or losses
- Changes in retirement income or distributions
- A home purchase or sale
- Changes in marital status or dependents
Beyond adjusting estimated payments, this is also a good opportunity to explore tax planning strategies that may help offset future tax liabilities. This is particularly important if you anticipate events such as a large bonus payout, vesting of RSUs or stock options, significant capital gains, deferred compensation payouts, or proceeds from the sale of a business.
Some strategies worth discussing with your advisor and tax professional may include:
- Donor-Advised Funds to bunch charitable contributions in high-income years and potentially eliminate capital gains taxes on highly appreciated securities
- Direct indexing strategies to harvest losses and manage capital gains exposure
- Tax-efficient asset location to ensure investments that generate the highest tax liabilities are held in tax-advantaged or tax-sheltered accounts whenever possible
- Maximizing tax-deferred retirement contributions, including options available to self-employed individuals or spousal IRAs where applicable
- Insurance-based strategies that may provide tax-advantaged accumulation or estate planning benefits
Taking a proactive approach to tax planning can help ensure your financial strategy remains aligned with your broader financial plan.
Resources
As you prepare to file your 2025 taxes, the IRS provides helpful guidance and updates on filing requirements and recent tax law changes:
- Get ready to file your taxes
- Federal income tax rates and brackets
- Credits and deductions for individuals
- IRS tax inflation adjustments and legislative updates
- Retirement plan contribution limits and RMD guidance
- Latest IRS tax news and developments
Final Thoughts
Tax season doesn’t have to be overwhelming. By staying organized, planning ahead, and working with a trusted team of professionals who can help you stay informed about tax law changes and shifts in your personal financial situation, the process can become much more manageable.
As part of your broader financial strategy, coordinating with your financial advisor and tax professional can help ensure you are not only prepared for tax season, but also positioned for smarter planning in the year ahead.