With tax season officially underway, here are several ideas to make filing your return as stress-free as possible:
Gather your tax information for filing. Items you’ll need include K-1s, W-2s, 1099s and other forms you receive from your business, employers, brokers, banks, and others. If you find any errors, contact the issuer immediately to request a corrected copy. And if you have tip or overtime income, be prepared to break this income out to take advantage of tax-free savings as this will not necessarily be broken out on your W-2.
Organize your records. Once you’ve started gathering your information, find a place in your house and put all the documents there as you receive them, or consider scanning documents to store on your computer. You can also take pictures of the documents with your phone as backup. Missing information is one of the biggest reasons filing a tax return becomes delayed.
Create an April 15th reminder. This is the deadline for filing your 2025 individual income tax return, completing gift tax returns, making contributions to a Roth or traditional IRA for 2025, and for paying the first installment of 2026 individual estimated taxes.
Know the deadlines for business returns. If you are a member in a partnership or a shareholder in an S corporation, the deadline for filing business returns for these two entities is March 16th. Calendar-year C corporation tax returns are due by April 15th.
Review your child’s income. Your child may be required to file a 2025 income tax return. A 2025 return is generally required if your child has earned more than $15,750, or has investment income such as dividends, interest, or capital gains that total more than $1,350.
Contribute to your IRA and HSA. You can still make 2025 IRA and HSA contributions through either April 15th or when you file your tax return, whichever date is earlier. The maximum IRA contribution for 2025 is $7,000 ($8,000 if age 50 or older). The maximum HSA contribution is $4,300 for single taxpayers and $8,550 for families.
Calculate your estimated tax if you need to extend. If you file an extension, you’ll want to do a quick calculation to estimate your 2025 tax liability. If you owe Uncle Sam any money, you’ll need to write a check by April 15th even if you do extend.
Plenty of tax changes are lining up as the calendar turns toward 2026, and knowing what’s coming can help you stay a step ahead. Before then, there’s also several moves to make filing your 2025 tax return as easy as possible.
Preparing to file your 2025 tax return
Gather records to support deductions for no tax on tips and no tax on overtime. Review the approved occupations for qualified tips and confirm the amount of this benefit you expect to claim in 2025. You will need proof of these claimed amounts. The same holds true for overtime pay. Employers are not required to issue W-2s or 1099s with this information in 2025, but they should provide you with the necessary confirmation of the dollar amounts. Compare these employer-provided amounts with your records to ensure they match prior to filing your tax return.
Look for new Form 1099-DA. If you own cryptocurrency or other digital assets, you may see this new form. Starting with the 2025 tax year, exchanges and brokers must report certain cryptocurrency and digital asset transactions, so you should track cost basis, sale dates, and wallets used to avoid mismatches or questions from the IRS.
1099-Ks may still be issued. You shouldn’t see a Form 1099-K from a payment processor such as PayPal or Venmo unless you have 200 or more transactions amounting in more than $20,000 in payments from the processor. But because of the many tax law changes in this area you may still receive a Form 1099-K in error. If you receive one, don’t throw it away! Include it with your other tax documents for proper reporting on your 2025 tax return.
Review IRA and HSA accounts. If you have an IRA or HSA account, you can make 2025 contributions up until either April 15, 2026 or the date you file your return, whichever is earlier.
What’s new in 2026
Above-the-line charitable contributions. You can deduct $1,000 of charitable contributions if single or $2,000 if filing jointly. This is available to you whether you use the standard deduction or itemize your deductions. There’s also the introduction of a 0.5% floor for itemizing charitable contributions.
Itemized deduction phaseout is back. If you’re in the top 37% tax bracket, your itemized deductions could be reduced. This phaseout of deductions is being re-introduced beginning in 2026.
Gamblers take a loss. Losses from wagering transactions are now limited to 90% of such losses. Under the previous law you could claim deductions up to the amount of your winnings. For example, if you won $10,000 and incurred $15,000 in losses over the course of a tax year, you could deduct $10,000 using the previous law. Under the new law you can only deduct 90% of your losses, or $9,000 in this example.
Mortgage insurance premiums can be reported as an itemized deduction.
Elimination of many energy credits. This includes the credit for purchasing electric vehicles after September 30, 2025 and the elimination of many residential energy efficient purchase credits at the end of 2025. So plan accordingly.
Property taxes are still on the upswing in many parts of the U.S. To help get a handle on your property taxes, here’s a look at what goes into determining your bill and a few ideas that may help to reduce it.
Background
Property taxes are typically calculated using two factors:
The assessed value of your property (set by your local assessor)
Your local tax rate (set by schools, counties, fire departments, etc.)
Why this matters: Even if your home’s value doesn’t change, your tax bill can go up if any of the taxing authorities raise their rates. And while setting the tax rates is usually a legislative process, establishing the value of your property often has judgement applied.
Ideas to lower your property tax bill
Understand and adhere to the calendar. Challenging the value of your property requires an understanding of the process for doing so AND hitting the proper deadlines. If there’s an appeals process, know it and make sure you meet their deadlines or you could be out of luck for that year.
Challenge your property’s assessed value. You have the right to appeal your property’s assessment by filing a formal appeal with your local assessor. If you can show your home was assessed for more than it’s worth compared to similar homes, you might get your tax bill reduced. If you want to appeal, you need to act fast. There are typically just a few weeks each year to appeal your assessment. So mark the date and gather evidence early if you plan to dispute it. But do your homework! Collect actual sales of similar properties that show a lower sales price, and be ready to defend the condition of your property if it is an older home. Assessors are quick to dismiss complainers with no facts to back them up.
Claim all exemptions and eligible tax breaks. Contact your local assessor’s office to see what exemptions you can claim. Many states and counties offer breaks for veterans, people with disabilities, low-income households, older residents and those in designated areas like historical districts or disaster zones.
Compare local tax rates before you buy or move. Property taxes are determined locally by counties, cities, or school districts, which means two identical homes in nearby ZIP codes can have drastically different tax bills. So always check the local tax rate before you buy or move. Look at the history of property taxes in your target neighborhood and see how it changed over the past several years. Then compare it with other homes in the area to ensure the rate increase is consistently applied.
Calculate the tax impact of renovations before building. Adding a new deck or renovating your kitchen may increase your home’s assessed value, especially if the county finds out through permits or a property inspection. So even if you don’t sell your home, upgrades can mean a bigger tax bill. Some areas reassess properties automatically after building permits are pulled. So always factor in long-term tax implications when upgrading your home.
Review your lot details for unused land. Your property tax bill covers not only the value of your house, but also the value of your land. If part of your property can’t be used, like wetlands, steep slopes, or areas with easements, ask your assessor if your bill can be adjusted.
Property taxes are one of the few taxes you can actually fight and get lowered. But you can’t do that if you don’t understand how the system works. So don’t just pay the bill without looking at it. There’s often money to be saved if you understand the details.
The U.S. tax code is constantly changing. What saved you money last year might cost you this year. Between shifting income thresholds, changing deduction rules, and overlooked credits, you now need to stay focused on your tax plan throughout the year. Here are several bits of tax wisdom that can help you lower your bill to the IRS.
Phaseouts matter (a lot). A lot of tax breaks, such as child tax credits, tax benefits for college costs, or the new senior deduction don’t disappear all at once. Instead, they phase out slowly as your income rises. This means earning a bit more could quietly cost you some of these benefits.
What you can do: Keep an eye on how much income you’re showing on paper and how it will impact these phaseouts. You might be able to stay in the sweet spot so you don’t lose the value of your deductions or credits by putting more into your retirement account or timing when you receive certain payments.
Are itemized deductions going the way of the dinosaur? Not so fast! Yes, the standard deduction is now higher than ever ($31,500 for married couples, $15,500 for singles in 2025), which has made itemizing less common. But with an increase of the state and local tax (SALT) deduction from $10,000 to $40,000, you may be shifting back to itemizing your deductions without realizing it.
What you can do: Don’t assume you’ll be taking the standard deduction again this year. Add up your potential itemized deductions, especially if your expenses vary, to see how close you are to being able to itemize. Consider bunching charitable contributions or property taxes into one year to clear the standard deduction hurdle.
Timing is everything (especially with capital gains). If you sell assets held longer than a year, you’ll likely qualify for long-term capital gains rates (0%, 15%, or 20%). But miss that time by even a day and you could pay ordinary income rates, which can be nearly double. Strategic timing can also help you harvest losses to offset gains and reduce your overall tax bill.
What you can do: If possible, hold investments that are profitable for at least one year and a day before selling to qualify for lower tax rates. Use end-of-year tax-loss harvesting to offset gains, and stagger sales across tax years if needed.
Don’t sleep on the Qualified Business Income deduction. If you’re a small business owner, self-employed, or even a gig worker, you may be eligible for a 20% deduction on your qualified business income. Planning how and when revenue hits your books could make or break your eligibility for this significant deduction.
What you can do: Review how your business is structured and how much income you’re reporting. You may be able to reduce taxable income through retirement contributions, shifting income between years, or reclassifying your business activities.
Tax-deferred doesn’t mean tax-free. Traditional 401(k)s and IRAs offer tax deferral, not tax elimination. When you withdraw funds in retirement, you’ll pay ordinary income tax on the distributions. If you expect to be in a high tax bracket in retirement, it may be a better idea to contribute to a Roth account now and pay taxes up front.
What you can do: Schedule a planning session to discuss whether diversifying your retirement accounts between traditional and Roth makes sense for your situation. Also consider planning for the timing of distributions from these accounts to be as tax efficient as possible. Run long-term tax projections to decide which type of contribution makes sense today. Consider partial Roth conversions during lower-income years. Tax planning isn’t a once-a-year scramble, but rather a year-round strategy. And with these pieces of prevailing tax wisdom, you can be better prepared to cut your tax bill. Please call if you have any questions about your tax situation.
As a freelancer or contractor, at some point you may wish to incorporate and be taxed as an S corporation. Here’s a closer look at the process of becoming an S corporation and when switching might make sense for you.
The main benefits of S corporations
Self-employment tax savings. As a sole proprietor, you’re required to pay a 15.3% self-employment tax (which includes Social Security and Medicare) on your entire income. However, with an S corporation, you can split your income into two parts: a reasonable salary (which is subject to Social Security and Medicare taxes) and distributions (which are subject to income taxes but not Social Security and Medicare taxes).
Pass-through taxation. Similar to sole proprietorships, S corporations are considered pass-through entities. This means that the business itself doesn’t pay income taxes. Instead, profits and losses pass through the business to the owner’s personal tax return. Profits of a C corporation, on the other hand, are taxed twice – once at the entity level, and again on the owner’s tax return.
Legal protection. If there is a risk of possible legal action, an S corporation can potentially help protect your personal assets from your business assets. For example, this can be especially helpful if you are in the contractor trade and the customer makes a claim against the fulfillment of your contract.
While transitioning from a sole proprietor to an S corporation can certainly result in significant tax savings, there are a few trade-offs to consider.
Trade-offs to consider
Most of the trade-offs are centered around administrative requirements and potential costs. These include:
Running payroll. Even if you’re the only employee, you’ll need to set up payroll and withhold taxes. Many business owners use a payroll service to handle this.
Separate tax filing. Your business will now need to file a Form 1120-S tax return with a March 15th due date in addition to your personal tax return.
Accountants or bookkeepers are typically used. Most S corporation owners work with professionals to handle bookkeeping and tax filings.
Reasonable salary requirement. The IRS expects owners to pay themselves a fair market wage. Underpaying yourself to avoid taxes can lead to penalties.
State-level requirements. Some states have minimum franchise taxes or annual fees for corporations and LLCs, regardless of income.
When it makes sense to switch
Switching to an S corp generally becomes worth considering when your net income (after expenses) is in the range of $75,000 to $100,000 or more per year.
Here’s an example: Assume you earn $120,000 in net income as a consultant.
As a sole proprietor, you’d pay self-employment tax on the full amount, about $18,000.
As an S corp, if you pay yourself a reasonable salary of $60,000, you’d only pay payroll taxes on that amount, roughly $9,200. The remaining $60,000 in profit would be subject to income taxes but not payroll taxes.
That’s a potential tax savings of nearly $9,000 per year.
Switching from a sole proprietor to S corp can offer real tax advantages, but it’s not a one-size-fits-all solution. It’s usually best practice to review your situation once per year to ensure your business is organized properly.
Our tax code contains plenty of opportunities to cut your taxes. There are also plenty of places in the tax code that could create a surprising tax bill. Here are some of the more common traps.
Home office tax surprise. If you deduct home office expenses on your tax return, you could end up with a tax bill when you sell your home in the future. When you sell a home you’ve been living in for at least 2 of the past 5 years, you may qualify to exclude from your taxable income up to $250,000 of profit from the sale of your home if you’re single or $500,000 if you’re married. But if you have a home office, you may be required to pay taxes on a proportionate share of the gain.
For example, let’s say you have a 100-square-foot home office located in a garage, cottage or guest house that’s on your property. Your main house is 2,000 square feet, making the size of your office 5% of your house’s overall area. When you sell your home, you may have to pay taxes on 5% of the gain. (TIP: If you move your office out of the detached structure and into your home the year you sell your home, you may not have to pay taxes on the gain associated with the home office.)
Even worse, if you claim depreciation on your home office, this could add even more to your tax surprise. This depreciation surprise could happen to either a home office located in a separate structure on your property or in a home office located within your primary home. This added tax hit courtesy of depreciation surprises many unwary users of home offices.
Kids getting older tax surprise. Your children are a wonderful tax deduction if they meet certain qualifications. But as they get older, many child-related deductions fall off and create an unexpected tax bill. And it does not happen all at once.
As an example, one of the largest tax deductions your children can provide you is via the child tax credit. If they are under age 17 on December 31st and meet several other qualifications, you could get up to $2,000 for that child on the following year’s tax return. But you’ll lose this deduction the year they turn 17. If their 17th birthday occurs in 2025, you can’t claim them for the child tax credit when you file your 2025 tax return in 2026, resulting in $2,000 more in taxes you’ll need to pay.
Limited losses tax surprise. If you sell stock, cryptocurrency or any other asset at a loss of $5,000, for example, you can match this up with another asset you sell at a $5,000 gain and – presto! You won’t have to pay taxes on that $5,000 gain because the $5,000 loss cancels it out. But what if you don’t have another asset that you sold at a gain? In this example, the most you can deduct on your tax return is $3,000 (the remaining loss can be carried forward to subsequent years).
Herein lies the tax trap. If you have more than $3,000 in losses from selling assets, and you don’t have a corresponding amount of gains from selling assets, you’re limited to the $3,000 loss.
So if you have a big loss from selling an asset in 2025, and no large gains from selling other assets to use as an offset, you can only deduct $3,000 of your loss on your 2025 tax return.
Planning next year’s tax obligation tax surprise. It’s always smart to start your tax planning for next year by looking at your prior year tax return. But you should then take into consideration any changes that have occurred in the current year. Solely relying on last year’s tax return to plan next year’s tax obligation could lead to a tax surprise.
Please call to schedule a tax planning session so you can be prepared to navigate around any potential tax surprises you may encounter on your 2025 tax return.
