Smart Planning for Tax Season 2025

It’s almost 2025, and that means the smart tax planning season has arrived. While it’s tempting to file taxes as quickly as possible, that can lead to a costly tax return mistake – and with an increasing average tax return of $2869, nobody wants to waste money.

More than 95% of households are expected to file online during tax season 2025, adding to the increasing percentage of e-filers. Before you file this year, take some time to prepare, double-check your tax return, and prepare for the largest possible refund.

Key Insights:

• Tuesday, April 15, 2025, is the filing deadline for tax return dates. Standard deductions for tax returns will increase by about $1800.
• Taxpayers who earned more than $5,000 through a payment app like PayPal or Venmo will receive a 1099-K. Be sure to include this income to avoid tax penalties. The IRS will also receive a copy. 
• For tax season preparation, be sure you have statements and information about all financial assets and income including digital assets like cryptocurrency and NFTs. 

Tax season deadlines will arrive quickly. Be sure you’re ready to file correctly with our planning and tax documents checklist.

What Is the Tax Deadline 2025?

Effective tax planning means paying attention to due dates. If you want to file your income taxes on time, you’ll need to file by the tax deadline, Tuesday, April 15, 2025. Tax filing season 2025 is underway, and the IRS starts accepting IRS form 1040 in early to mid-January. As tax season kicks off, remember that you can file your taxes, or you can file an extension if you need more time. If you file an extension by April 15, 2025, your tax return won’t be due until October 15, 2025.

Other entities have different tax filing deadlines.

• The deadline to file partnership taxes (Form 1065) is March 17, 2025. The extended partnership deadline is September 15, 2025.
• C corporations must file taxes (Form 1120) by April 15, 2025. The extended deadline for C Corporations (Form 7004) is October 15, 2025.
• S corporations must file taxes (Form 1120S) by March 15, 2025. The extended deadline for S corporations (Form 7004) is September 15, 2025.

The abovementioned tax forms are available here.

How to Prepare for Tax Season 2025

Wondering how to prepare for tax season? Your first steps are to be sure you understand the process. Here are the basic steps to help you prepare for the coming tax season. 

1. Gathering tax documents

You may receive these forms electronically or in the mail (or both.) Many online tax preparation services have forms available near the start of January. Documents to have on hand include:

• W-2 forms sent from employers.
• 1099-MISC forms for miscellaneous income.
• 1099-INT forms for interest income.
• 1099-G forms for government payments including unemployment.
• 1099-K for receipts through various cash and financial apps. 
• Form 1095-A for health insurance documentation.
• Evidence of IRA contributions.
• Evidence of charitable donations.
• Receipts of large purchases, mortgage interest payments, and other tax-deductible items. 

2. Estimation and paying tax owed

Look through your tax forms from the previous year to check whether it is likely that you owe any tax. If you fail to pay the tax you owe, you risk interest and penalties. April 15th is the date when penalties start accruing. The IRS will charge interest on late or unpaid taxes, regardless of cause. Remember, as you earn more money your tax brackets will shift and you’ll owe more taxes. The 2025 tax brackets range from 10% to 37%.

The tax return dates in 2025 are the same regardless of whether you owe taxes or if the IRS owes you a tax refund. But there is greater urgency if you owe the government tax funds. The government will not charge fees if you fail to claim what they owe you. They will certainly charge penalties and interest if you fail to send what you owe them. A 2025 tax refund estimator can help determine if you are likely to owe money so you can plan accordingly.

3. IRA (individual retirement account) contributions information

Form 5498: IRA Contributions Information reports your IRA contributions to The Internal Revenue Service (IRS). Deductible IRA contributions are limited to $7,000 in 2025 or $8,000 if you are age 50 or older, for both traditional and Roth IRAs, a type of IRA that lets an investor save up to a certain amount of after-tax dollars each year. The earnings in the account grow tax-free, and distributions taken after age 59½ (if the account has been open for at least 5 years) are exempt from taxes.

You will get a tax break for contributing to certain types of IRAs, and you can make contributions to your IRA after the end of the calendar year. For example, you can contribute to your IRA in March of 2025 and apply the tax savings on your 2024 tax form. 

4. Filing for an extension

 If there is a situation when you may miss a deadline for filing taxes or make mistakes because you're in a rush, you should request an extension. In order to get a 6-month extension, there are different forms:

• Partnerships, S Corporations, and C Corporations use Form 7004.
• Individuals use Form 4868.
• Nonprofit and charity organizations use Form 8868 to request a 3-month extension.

While filing tax returns and gathering the necessary documentation, you should also consider the following:

• Are you using the itemized deduction or a standard deduction? Itemized deductions are claimed on Schedule A of Form 1040, which must be attached to your annual tax return. It is usually claimed in case of state and local taxes, gifts to charity, home loan interest, tax preparation fees, medical and dental expenses. A standard deduction is a fixed dollar amount, based on your filing status and age, that the IRS lets you take off (deduct) from your taxable income. 
• Business expenses. You can claim certain items as business expenses during the year and justify them to the IRS.
• Donations and dues may be considered and claimed as a tax deduction. Add receipts to your documentation and provide information on how much you have donated.
• Finance documents. Bank e-statements, credit card e-statements, retirement account information put in a tax folder. You will need information and data to support the numbers used for your taxes.

5. Optimizing tax efficiency by accounting for life changes

Taxes are not static. Changes in your family or income situation impact your tax situation. When filing taxes, you should be prepared to document and provide information about the following:

• Changes to your marital status.
• Having a baby, or claiming dependents - reduces your tax rates, gives access to the Child Tax Credit, tax benefits like credits for education to the Earned Income Tax Credit.
• Educational expenses - The American Opportunity Credit and the Lifetime Learning Credit can help offset $2,500 or more of your qualifying educational expenses. If you're paying off a student loan, you can deduct up to $2,500 of your interest on your taxes. The cost to obtain certain professional certifications or designations can also be written off on your taxes.
• Retirement contributions and distributions.
• Inheritance is tax-free.
• Starting or finishing an expat assignment. Expats receive an automatic 2-month extension.

Tax preparation is a real challenge for most people who are not sure if they should seek professional assistance or do it themselves. Sometimes, it is better and easier to consult with a tax professional to learn what state taxes are and to pay your tax liability on time. There is a strong demand for tax preparation services because of the task complexity and importance.

There are many tax preparation companies on the market. It’s important to read tax reviews and tax complaints before committing to a company. By researching the experience of others, you may be able to avoid many of the more common frustrations or even tax scams.  

How to Choose Online Tax Software?

Tax forms can be complicated without some sort of financial assistance. The IRS offers a partnership with many companies to file simple tax returns online, which helps a large percentage of individuals file quickly and easily without needing to pay tax preparation fees.

Generally, the more complicated your financial situation, the more expensive your tax preparation will be. What you want to avoid is overpaying a company or feeling like you were taken advantage of. Large companies that have been around for decades often have quality control measures in place. Smaller companies that seem to materialize overnight might be more suspicious. But large or small, trouble can still show up.

You have several options when it comes to filing your taxes:

• Work with a certified accountant to file. This is a good option if you have a complicated situation involving multiple investments, overseas accounts, or business taxes. Accountants can have substantial tax preparation fees.
• Take advantage of free tax preparation software and services offered by various organizations in your area. These are often sponsored by groups like AARP or local churches.
• Use discount tax preparation services through dedicated companies like HR Block or Liberty Tax in the storefront or other locations.
• Use online tax preparation software to file taxes yourself with the online preparation service’s guidance. Many individuals find these online services to be efficient and low-priced or even free based on income.

Filing your tax return with assistance

The first three options above involve finding either paid or voluntary assistance with your taxes. This is where you can help yourself by reading tax reviews before committing to a company. Negative experiences described in tax reviews can help you choose a company that might be a better fit for you.

As you prepare to file taxes, consider the options available to help you in the process. Tax preparation software makes filing your return with the IRS quick and easy, but you want to be sure you make the right choice. 

Many companies are offering tax preparation software for consumers, but they aren’t all created equally. That’s why it’s important to read tax software reviews to be sure you’re paying for and using the right service for your specific needs. 

Preparing and filing taxes on your own

Of course, you can file taxes yourself and skip the preparation companies. Check out the tax software reviews to find the best program to suit your needs and then, using your tax documents, enter the required information to complete the process. Although sometimes this process doesn’t work as well as one might hope. 

Among the Turbo Tax reviews, there are many customers who are frustrated about how the software works. One customer explained that they used TurboTax to help them file 2023 taxes. According to the reviewer’s complaint 

I filed my taxes with TurboTax several months ago and TurboTax advertised that the service was free. When it was time to push the file button, I was hit with a bill of over $200!

The reviewer feels that:

TurboTax advertising was not accurate and misleading so I'm stuck with not being able to file through TurboTax.

And now the customer is looking for other options “because my taxes will never be filed with TurboTax because of the fees I cannot pay.”

Best practices for filing taxes on your own

If you choose to file your taxes, you will simply create an account with an online tax company and enter the information from your own tax documents. There are many popular filing options including HR Block, Taxact, and Turbo Tax. If your tax return is simple, you may be able to file a free return. If you have a more complicated scenario, you will have to pay to use the updated version of the software to file.

You have the option to use the software independently, or you can pay for a bit of extra support to get answers or advice from the company’s representatives and tax professionals. Of course, even though the process of tax preparation using software should be simple, the reality can be more complicated for some individuals.

Another TurboTax user complained that the software “did not instruct me to attach other documents other than the return that I printed out and mailed” and now since the “IRS wanted to physically see 1099s or W-2s”, the reviewer has been hit with a penalty and “punitive damages for not paying my estimated taxes exactly on the due date.”

To avoid issues like these with online tax preparation software, you should always:

• Read tax service reviews about software on a website like PissedConsumer.com. This will help you understand what to expect and avoid various tax scams. 
• Try out a demo version and read properly all the details about the product.
• Consider using the IRS Free File to prepare and file your federal income tax return for those who qualify or the IRS Free Fillable Forms for all taxpayers. These free tax preparation online resources are affordable and secure.
• Consider using the IRS Volunteer Income Tax Assistance and the Tax Counseling for Elderly programs which are developed to provide free tax help and e-file for taxpayers who qualify.

Recent Tax Law Changes

The IRS updates elements of the tax code every year, and tax year 2025 is no exception. Among the changes for this year are adjustments in the tax brackets, increased standard deductions, and shifts to the Alternative Minimum Tax that are tied to increasing inflation. 

New tax brackets and withholding

There are new 2025 tax brackets already in effect, designed to counter inflation. The updated tax brackets are accompanied by new withholding guidelines. These limits have companies withhold less from paychecks. The tax laws updated the brackets to boost the amount of money individuals take home in their paychecks, but that might limit the amount they get back as tax returns. 

Higher standard deductions

The IRS also raised the standard deductions for this tax filing season. With a higher deduction, more of your taxes will be returned to you, helping to offset the tax complaints that the updated tax brackets might generate. The standard deduction for a single taxpayer is $14,600, or $29,200 for married couples filing jointly.

Plan Ahead to File Taxes

Taxes require a lot of preparation. From gathering documents to creating spreadsheets, your tax plan requires checking and double-checking your numbers. Whether you used software or a tax professional to help this year, be sure to get your returns done correctly and on time. Have a tax issue or story about tax preparation? Why not write a review to share your experience with others?