Saving money is crucial for financial security, providing a safety net for emergencies, enabling long-term goals, and fostering financial stability. But what about taxes when you sell those assets and how can you avoid them?
Tax season often brings a mix of anticipation and anxiety. You might look forward to a potential refund, but the process of gathering documents and navigating complex forms can feel overwhelming. At Russo Law Group, we believe that preparation is the antidote to tax-time stress.
Whether you are filing early to beat the rush or gathering your documents for a later deadline, understanding the landscape of the 2026 tax season (filing for the 2025 tax year) is essential. Here is what you need to know to prepare, submit, and maximize your return this year.
Essential Preparation Tips for 2026
The key to a smooth filing experience happens long before you sit down with a tax professional or log into your software. Organization saves time and reduces errors.
Gather Your Documents Early
Avoid the frantic search for lost paperwork. Create a dedicated folder—digital or physical—for all tax-related documents. Ensure you have the basics:
- W-2s from employers.
- 1099s for contract work, interest, or dividends.
- Mortgage interest statements (Form 1098).
- Receipts for charitable donations and medical expenses if you plan to itemize.
Review Your Personal Information
Life changes affect your taxes. Did you get married, divorced, or have a child in 2025? Did you buy a home or start a business? These milestones trigger different tax implications. Ensure your address and dependent information are current to prevent processing delays.
Check Your Withholdings
If you owed money last year or received a massive refund, you might want to adjust your W-4 with your employer. While a big refund feels nice, it essentially means you gave the government an interest-free loan. Adjusting your withholdings puts more money in your pocket throughout the year.
Notable Changes for the 2026 Tax Season
Tax laws are rarely static. Inflation adjustments and expiring provisions often shift the goalposts. For the return you are filing in 2026 (covering income earned in 2025), keep an eye on these areas.
Inflation Adjustments to Standard Deductions
The IRS typically adjusts standard deductions and tax brackets annually to account for inflation. For this filing season, you will likely see a modest increase in the standard deduction. This is crucial for taxpayers who do not itemize, as it directly reduces your taxable income without requiring receipt tracking.
Retirement Contribution Limits
If you maximized your 401(k) or IRA contributions in 2025, you are in a strong position. The contribution limits were adjusted upward, allowing you to shield more income from taxes while saving for your future. If you haven’t contributed yet, remember that you generally have until the tax filing deadline (April 15, 2026) to make contributions to an IRA for the 2025 tax year.
Energy Credits
Green energy incentives remain a significant part of the tax code. If you installed solar panels, a heat pump, or purchased an electric vehicle in 2025, double-check the current credit limits. These are often direct reductions of your tax bill, rather than just deductions from your income.
Strategies to Maximize Your Return
Getting the best possible outcome requires looking beyond the standard forms. Here are strategic moves to consider.
Don’t Overlook “Above-the-Line” Deductions
You can take certain deductions even if you don’t itemize. These are subtracted from your gross income to arrive at your Adjusted Gross Income (AGI). Common examples include:
- Student loan interest: Up to $2,500 can typically be deducted.
- Educator expenses: Teachers can deduct out-of-pocket costs for classroom supplies.
- HSA contributions: Contributions to a Health Savings Account are 100% tax-deductible.
Bundle Your Deductions
If your total itemized deductions fall just short of the standard deduction, consider “bunching.” This strategy involves grouping two years’ worth of deductible expenses into a single tax year. For example, you might make your 2025 and 2026 charitable donations all in 2025 to surpass the standard deduction threshold for this filing, then take the standard deduction next year.
Review State-Specific Credits
While federal taxes get the most attention, don’t ignore state opportunities. Many states offer credits for renters, education savings (529 plans), and property taxes that federal returns do not.
When to Seek Help
Filing taxes is a yearly obligation, but it doesn’t have to be a burden. If your financial situation involves trusts, estate planning complexities, or significant business assets, simple tax software may not be enough.
Complex scenarios often require a professional eye to ensure compliance and optimization. If you are unsure about how your estate plan or trust affects your tax liability, we are here to help guide you through the intersection of legal planning and tax obligations.
Ready to get your affairs in order for 2026 and beyond? Contact our office at 1 (800) 680-1717. We look forward to the opportunity to work with you.
Disclaimer: The information provided above is for general informational purposes only and is not legal advice.
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