2025 Tax Season Client Letter
Navigating the 2025 Tax Season
Key Changes, Deadlines, and Preparation Tips
As we begin the 2025 tax season, we want to thank you for your continued trust in our firm. This year brings an unusually large number of tax law changes, inflation adjustments, and provisions from the One Big Beautiful Bill Act (OBBBA), that are scheduled to change in the coming years. Below is a high-level overview of items most likely to affect many of our individual and business clients.
Major Changes That May Affect You
• Standard Deduction & Tax Brackets: Standard deductions and tax brackets have increased again for inflation in 2025. Taxpayers age 65 and older may qualify for an additional standard deduction of up to $6,000, depending on filing status.
• Expanded & Modified Deductions: New or expanded deductions may apply to certain types of income and expenses, including tips and overtime pay, interest on qualifying vehicle loans, and ongoing limitations related to the state and local tax (SALT) deduction cap.
• Retirement Contributions: Contribution limits for retirement accounts have increased, creating additional tax-saving opportunities.
• Energy Credits: Credits for energy-efficient home improvements and clean vehicles remain available, though qualification rules continue to evolve.
Small Business & Self-Employed Considerations
• Bonus depreciation has been restored, making the timing of equipment and vehicle purchases more important than in prior years.
• S corporations and partnerships must continue to meet earlier filing deadlines, and penalties for late or incomplete filings remain significant.
• Reviewing estimated tax payments remains important to avoid underpayment penalties.
Important Deadlines
• Business returns are due March 16, 2026.
• Individual returns are due April 15, 2026.
• Extensions must be filed by the original due date. An extension to file is not an extension to pay.
Tips for a Smooth Tax Season
• Gather W-2s, 1099s, investment statements, and business records as soon as they are available.
• To ensure timely processing, we request business information by February 15, 2026, and individual information by March 15, 2026.
• Please notify us of major life changes such as births, deaths, changes in marital status, retirement, or the purchase or sale of significant assets.
Payment Reminder
Payment is due at the time your return is completed. Credit card payments are subject to a 3% processing fee; there is no fee for cash, check, or debit card payments.
We are here to help navigate these changes and ensure your tax season is as smooth as possible. If you have any questions or need assistance, please do not hesitate to reach out.
Thank you for your loyalty,
Sincerely,
Denise Castro, CPA