They’ve already started to arrive in my mailbox—forms with “Important Tax Information” in bold on the front. Puzzling machine-generated envelopes with multi-step opening instructions: “Unzip here first. Then here. Then here.”
Yes, it’s tax season and if you’re like me you’re tossing all that mail into a 2025 Taxes folder with a plan to do all the unzipping in a couple weeks. But don’t wait too long. April will be here soon and this year is not a typical tax year.
Of course, if you ask a tax preparer they’ll tell you that none of the past few years have been typical. There’s always some new twist. The big bill that was passed last year in Congress made significant changes to the federal tax code. So, you’ll want to be prepared—whether you do your own taxes or have someone do them for you.
What’s new
Federal taxes don’t seem to ever get less complicated. The new tax law has added some opportunities for specific groups to save, but there are limitations and many of the new deductions are temporary. Be sure you talk to a tax professional to see how these changes impact you.
SALT taxes: No, pretzels and potato chips are not getting a special tax. SALT stands for state and local taxes. People who itemize can now deduct up to $40,000 in taxes on earned income, sales tax, and property tax through 2029—up from $10,000. People who don’t normally itemize may now have a reason to, especially higher earners in high-tax states.
Senior deduction: Eligible taxpayers age 65 and older can take an additional senior deduction of up to $6,000 per person through 2028. The deduction begins to phase out if your modified adjusted gross income exceeds specific thresholds, but if you or your spouse were 65 or older in 2025, be sure you’re not leaving money on the table.
Charitable giving: Because the new tax laws will be in place for just a few years, you may want to consider the timing of your charitable giving, particularly if you itemize your taxes. If you have a multi-year giving plan, there may be tax benefits to bunching those donations—accelerating multiple years’ worth of gifts into one.
IRAs and Roths: If your retirement portfolio includes IRAs, don’t let them sit unattended. Your financial planner will help you assess your current situation and balance it with what’s going on in financial markets. They may show you how strategies like a Roth conversion or timing of your Required Minimum Distributions (RMDs) can help reduce your tax bill.
It goes without saying, but I’m going to say it anyway: I’m not a tax expert. Financial planning and tax preparation need to be personalized to your needs and your situation. Lots of factors come into play, including your age, income, investment portfolio, and where you live. Your Arrivity financial planner will help you make a plan to reduce your tax burden. They can also connect you with a professional tax preparer who knows all the new rules.
Things to think about as April looms:
- Talk to your financial planner about the tax benefits of donating stocks, setting up a donor-advised giving fund, or bunching your charitable donations.
- A new job, move, marriage, divorce, or a new family member can impact your taxes. Make sure your tax preparer knows about any big life changes.
- Save tax documents as you receive them, including W-2s and 1099s; records of deductible expenses; and tax forms from investments. Some items may have to be downloaded online.
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Liz is a Late Boomer in the sandwich generation who started an independent writing and brand consulting practice after years as a senior marketing executive. She lives in Seattle, Washington. Her mother lives nearby and her daughter is a recent college graduate.
The foregoing content reflects the opinions or perspective of Liz Behlke and/or Arrivity financial planners and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful. Arrivity does not give tax or legal advice. Tax and/or legal strategies should be discussed with a professional before implementing.