5 Ways to Kickstart Your Tax Planning for 2025 and Beyond
As inflation and economic uncertainty continue to impact Americans’ purchasing power, strategic tax-planning initiatives have become an essential tool in preserving financial stability. By leveraging tax-saving opportunities, you can minimize your tax burden, maximize deductions and credits and potentially keep more of your hard-earned income. Effective tax planning is not a one-time event, but rather an ongoing process—make your money work smarter with these five tax strategies you can implement before the 2025 tax season and beyond.
1. Confirm Your Filing Status
A taxpayer’s filing status determines their filing requirements, standard deduction, eligibility for certain credits and the amount of tax they should pay. While you may be familiar with your tax filing options, reviewing them annually can be beneficial if/when changes in the family occur such as marriage, divorce, birth, death and more. To ensure you choose the most beneficial filing status, the IRS has provided tools to make the process easier:
- The Interactive Tax Assistant questionnaire provides answers to several tax law questions specific to you, including your filing status.
- The IRS Publication 501 is a comprehensive guide outlining filing status qualifications, standard deduction amounts, dependent rules and more.
2. Adjust Your Payroll Withholdings
Since federal income tax operates on a pay-as-you-go basis, you’ll need to pay most of your tax liability throughout the year as you earn income. If you are an employee, this is done through payroll withholding, where your employer deducts and submits estimated tax payments from each paycheck on your behalf. Check with your tax preparer annually to confirm your employer is withholding an appropriate amount to cover the taxes you’ll owe.
To easily evaluate if you’re withholding the proper amount, utilize the IRS Withholding Estimator. This estimator allows you to input your projected income, credits, deductions and adjustments for the year. If the results show you aren’t having enough withheld or are over-withholding, talk with your employer about submitting a new Form W-4 with updated withholding instructions.
Adjusting your withholdings proactively helps ensure you don’t overpay or underpay taxes during the year. This can provide peace of mind and prevent a large bill or excessive refund when you file your annual tax return.
3. Itemizing vs. Taking the Standard Deduction
When filing your taxes, you’ll need to decide whether to itemize your deductions or take the standard deduction. Itemizing allows you to list all the individual deductions you qualify for throughout the year, such as state and local taxes, mortgage interest, charitable donations and eligible medical expenses. The total of these itemized deductions could potentially exceed the standard deduction, which is a fixed dollar amount based solely on your filing status.
To maximize your tax savings, you’ll want to calculate your potential itemized deductions and compare this to your filing standard deduction. If your itemized deductions exceed the standard amount, you’ll generally benefit more from itemizing and listing those qualified expenses. However, if the standard deduction is higher than your total itemized expenses, you’re better off taking the standard amount, which is the simpler option.
4. Implement Prior Year’s Tax Planning Advice
If you worked with a financial advisor, certified public accountant (CPA) or other tax professional when filing your 2023 tax return, it’s highly recommended to implement any suggestions provided. Their recommendations keep your best interests in mind and can help you maximize your tax savings and avoid potential penalties.
Your financial circumstances can shift annually, so revisiting your tax professional’s suggestions from the prior year is crucial. Their expertise can steer you toward smart strategies to minimize your tax burden while avoiding potential penalties in the future.
5. Keep Your CPA In the Know
By maintaining open communication with your CPA, you can stay ahead of potential tax issues and make informed decisions, saving you money come tax time. Don’t wait until the last minute—keep your CPA in the loop and leverage their expertise to maximize your tax savings.
Events like marriage, divorce, the birth of a child or large fluctuation in taxable income from the sale of stock, real estate, sale of a business or required distributions from an inherited IRA may impact your tax situation—your CPA can help you navigate these changes and ensure you’re taking advantage of all available deductions, credits and tax planning opportunities.
Take Advantage Today
Tax season doesn’t have to be a hassle—consulting with a tax professional could be the key to your future savings and financial prosperity. By gaining a better understanding of where you fall on the tax bracket, adjusting your withholdings, itemizing vs. taking the standard deduction, implementing your CPA’s recommendations and keeping them informed on large transactions, you can position yourself for financial success. The key to maximizing your tax strategies is being proactive before tax season rolls around. Our Trusted Advisors at KerberRose are experienced financial professionals who can help you navigate your tax planning strategies—contact us today and get on the right path toward success.
5 Ways to Kickstart Your Tax Planning for 2025 and Beyond
As inflation and economic uncertainty continue to impact Americans’ purchasing power, strategic tax-planning initiatives have become an essential tool in preserving financial stability. By leveraging tax-saving opportunities, you can minimize your tax burden, maximize deductions and credits and potentially keep more of your hard-earned income. Effective tax planning is not a one-time event, but rather an ongoing process—make your money work smarter with these five tax strategies you can implement before the 2025 tax season and beyond.
1. Confirm Your Filing Status
A taxpayer’s filing status determines their filing requirements, standard deduction, eligibility for certain credits and the amount of tax they should pay. While you may be familiar with your tax filing options, reviewing them annually can be beneficial if/when changes in the family occur such as marriage, divorce, birth, death and more. To ensure you choose the most beneficial filing status, the IRS has provided tools to make the process easier:
- The Interactive Tax Assistant questionnaire provides answers to several tax law questions specific to you, including your filing status.
- The IRS Publication 501 is a comprehensive guide outlining filing status qualifications, standard deduction amounts, dependent rules and more.
2. Adjust Your Payroll Withholdings
Since federal income tax operates on a pay-as-you-go basis, you’ll need to pay most of your tax liability throughout the year as you earn income. If you are an employee, this is done through payroll withholding, where your employer deducts and submits estimated tax payments from each paycheck on your behalf. Check with your tax preparer annually to confirm your employer is withholding an appropriate amount to cover the taxes you’ll owe.
To easily evaluate if you’re withholding the proper amount, utilize the IRS Withholding Estimator. This estimator allows you to input your projected income, credits, deductions and adjustments for the year. If the results show you aren’t having enough withheld or are over-withholding, talk with your employer about submitting a new Form W-4 with updated withholding instructions.
Adjusting your withholdings proactively helps ensure you don’t overpay or underpay taxes during the year. This can provide peace of mind and prevent a large bill or excessive refund when you file your annual tax return.
3. Itemizing vs. Taking the Standard Deduction
When filing your taxes, you’ll need to decide whether to itemize your deductions or take the standard deduction. Itemizing allows you to list all the individual deductions you qualify for throughout the year, such as state and local taxes, mortgage interest, charitable donations and eligible medical expenses. The total of these itemized deductions could potentially exceed the standard deduction, which is a fixed dollar amount based solely on your filing status.
To maximize your tax savings, you’ll want to calculate your potential itemized deductions and compare this to your filing standard deduction. If your itemized deductions exceed the standard amount, you’ll generally benefit more from itemizing and listing those qualified expenses. However, if the standard deduction is higher than your total itemized expenses, you’re better off taking the standard amount, which is the simpler option.
4. Implement Prior Year’s Tax Planning Advice
If you worked with a financial advisor, certified public accountant (CPA) or other tax professional when filing your 2023 tax return, it’s highly recommended to implement any suggestions provided. Their recommendations keep your best interests in mind and can help you maximize your tax savings and avoid potential penalties.
Your financial circumstances can shift annually, so revisiting your tax professional’s suggestions from the prior year is crucial. Their expertise can steer you toward smart strategies to minimize your tax burden while avoiding potential penalties in the future.
5. Keep Your CPA In the Know
By maintaining open communication with your CPA, you can stay ahead of potential tax issues and make informed decisions, saving you money come tax time. Don’t wait until the last minute—keep your CPA in the loop and leverage their expertise to maximize your tax savings.
Events like marriage, divorce, the birth of a child or large fluctuation in taxable income from the sale of stock, real estate, sale of a business or required distributions from an inherited IRA may impact your tax situation—your CPA can help you navigate these changes and ensure you’re taking advantage of all available deductions, credits and tax planning opportunities.
Take Advantage Today
Tax season doesn’t have to be a hassle—consulting with a tax professional could be the key to your future savings and financial prosperity. By gaining a better understanding of where you fall on the tax bracket, adjusting your withholdings, itemizing vs. taking the standard deduction, implementing your CPA’s recommendations and keeping them informed on large transactions, you can position yourself for financial success. The key to maximizing your tax strategies is being proactive before tax season rolls around. Our Trusted Advisors at KerberRose are experienced financial professionals who can help you navigate your tax planning strategies—contact us today and get on the right path toward success.
5 Ways to Kickstart Your Tax Planning for 2025 and Beyond
As inflation and economic uncertainty continue to impact Americans’ purchasing power, strategic tax-planning initiatives have become an essential tool in preserving financial stability. By leveraging tax-saving opportunities, you can minimize your tax burden, maximize deductions and credits and potentially keep more of your hard-earned income. Effective tax planning is not a one-time event, but rather an ongoing process—make your money work smarter with these five tax strategies you can implement before the 2025 tax season and beyond.
1. Confirm Your Filing Status
A taxpayer’s filing status determines their filing requirements, standard deduction, eligibility for certain credits and the amount of tax they should pay. While you may be familiar with your tax filing options, reviewing them annually can be beneficial if/when changes in the family occur such as marriage, divorce, birth, death and more. To ensure you choose the most beneficial filing status, the IRS has provided tools to make the process easier:
- The Interactive Tax Assistant questionnaire provides answers to several tax law questions specific to you, including your filing status.
- The IRS Publication 501 is a comprehensive guide outlining filing status qualifications, standard deduction amounts, dependent rules and more.
2. Adjust Your Payroll Withholdings
Since federal income tax operates on a pay-as-you-go basis, you’ll need to pay most of your tax liability throughout the year as you earn income. If you are an employee, this is done through payroll withholding, where your employer deducts and submits estimated tax payments from each paycheck on your behalf. Check with your tax preparer annually to confirm your employer is withholding an appropriate amount to cover the taxes you’ll owe.
To easily evaluate if you’re withholding the proper amount, utilize the IRS Withholding Estimator. This estimator allows you to input your projected income, credits, deductions and adjustments for the year. If the results show you aren’t having enough withheld or are over-withholding, talk with your employer about submitting a new Form W-4 with updated withholding instructions.
Adjusting your withholdings proactively helps ensure you don’t overpay or underpay taxes during the year. This can provide peace of mind and prevent a large bill or excessive refund when you file your annual tax return.
3. Itemizing vs. Taking the Standard Deduction
When filing your taxes, you’ll need to decide whether to itemize your deductions or take the standard deduction. Itemizing allows you to list all the individual deductions you qualify for throughout the year, such as state and local taxes, mortgage interest, charitable donations and eligible medical expenses. The total of these itemized deductions could potentially exceed the standard deduction, which is a fixed dollar amount based solely on your filing status.
To maximize your tax savings, you’ll want to calculate your potential itemized deductions and compare this to your filing standard deduction. If your itemized deductions exceed the standard amount, you’ll generally benefit more from itemizing and listing those qualified expenses. However, if the standard deduction is higher than your total itemized expenses, you’re better off taking the standard amount, which is the simpler option.
4. Implement Prior Year’s Tax Planning Advice
If you worked with a financial advisor, certified public accountant (CPA) or other tax professional when filing your 2023 tax return, it’s highly recommended to implement any suggestions provided. Their recommendations keep your best interests in mind and can help you maximize your tax savings and avoid potential penalties.
Your financial circumstances can shift annually, so revisiting your tax professional’s suggestions from the prior year is crucial. Their expertise can steer you toward smart strategies to minimize your tax burden while avoiding potential penalties in the future.
5. Keep Your CPA In the Know
By maintaining open communication with your CPA, you can stay ahead of potential tax issues and make informed decisions, saving you money come tax time. Don’t wait until the last minute—keep your CPA in the loop and leverage their expertise to maximize your tax savings.
Events like marriage, divorce, the birth of a child or large fluctuation in taxable income from the sale of stock, real estate, sale of a business or required distributions from an inherited IRA may impact your tax situation—your CPA can help you navigate these changes and ensure you’re taking advantage of all available deductions, credits and tax planning opportunities.
Take Advantage Today
Tax season doesn’t have to be a hassle—consulting with a tax professional could be the key to your future savings and financial prosperity. By gaining a better understanding of where you fall on the tax bracket, adjusting your withholdings, itemizing vs. taking the standard deduction, implementing your CPA’s recommendations and keeping them informed on large transactions, you can position yourself for financial success. The key to maximizing your tax strategies is being proactive before tax season rolls around. Our Trusted Advisors at KerberRose are experienced financial professionals who can help you navigate your tax planning strategies—contact us today and get on the right path toward success.