5 Helpful Tips to Get a Head Start on Next Year’s Taxes

If you want to make next year’s tax filing easier and more rewarding, now is the perfect time to get started. Waiting until the last minute is a common mistake, and it can cost you, whether it’s a missed deduction, a surprise bill, or unnecessary stress. 

With a few simple strategies, you can stay ahead of the game, reduce your tax liability, and potentially boost your refund. Ready to get proactive? Here are five helpful tips to set yourself up for success with your taxes.

1. Adjust Your Withholding or Estimated Payments

One of the most effective ways to prepare for next year’s taxes is to review your withholding or estimated payments now. If you’re a traditional W-2 employee, it’s a good idea to check your Form W-4, especially if your income has changed, you started a second job, or your filing status has shifted due to life events like marriage or divorce.

Too little withholding can result in a hefty tax bill come next April, while too much means the government is holding onto money you could be using throughout the year. The IRS provides a Tax Withholding Estimator to help you figure out if you're on track.

For freelancers or small business owners, estimated quarterly payments are crucial. Missing these or underpaying could result in penalties, so it’s wise to revisit your estimated tax strategy now, based on your current earnings.

2. Track and Maximize Deductions Year-Round

The time to start organizing your deductions isn’t in January, it’s now. Keeping detailed records throughout the year makes it easier to claim all the deductions you’re eligible for. Common deductions include medical expenses, student loan interest, mortgage interest, charitable donations, and state and local taxes.

Even small expenses add up. Maybe you donated clothes to a nonprofit, paid union dues, or invested in professional development. Create a designated folder (digital or paper) for receipts and keep track of them with a spreadsheet or a personal finance app.

Also, consider whether you’re better off itemizing or taking the standard deduction. While many Americans now opt for the standard deduction due to the recent increases, itemizing can still be worthwhile for those with significant eligible expenses. Start tracking your expenses now so you can make an informed choice later.

3. Take Advantage of Retirement Contributions and Tax-Advantaged Accounts

Not only are retirement accounts a smart way to save for your future. They can also help you save on your taxes right now. Contributions to traditional IRAs and 401(k)s can lower your taxable income, which might also put you in a lower tax bracket.

For tax year 2025, the IRS has set contribution limits up to $23,500, an increase over last year. For people over age 50, the new contribution limit is $31,000, and for workers aged 60-63, the limit is now $34,750. Making monthly contributions to your retirement accounts throughout the year can help you reach those maximums more easily. If you’re self-employed, don’t forget options like SEP IRAs or solo 401(k)s.

Health Savings Accounts (HSAs) are another powerful, tax-advantaged option if you have a qualifying high-deductible health plan. Contributions are tax-deductible, withdrawals for medical expenses are tax-free, and earnings grow tax-deferred. HSAs can also double as long-term savings tools for health-related costs in retirement.

4. Stay Organized with Important Tax Documents

Don’t let tax documents pile up in your junk drawer. One of the easiest ways to reduce stress during tax season is to keep your forms and records organized throughout the year. Create a central spot, whether it’s a folder on your desktop or a physical file box, where you can collect anything related to your taxes.

This includes income documents like W-2s and 1099s, bank interest statements, brokerage account summaries, and records of any capital gains or losses. If you’re self-employed, hold on to documentation for business expenses, including receipts, invoices, and mileage logs.

Being organized will also help in the event of an audit. The IRS recommends keeping records for at least three years.

5. Consider Big Life Changes and How They Impact Your Taxes

Did you get married, divorced, have a baby, buy a home, or start a new job this year? Each of these life changes can significantly impact your tax situation. For instance, having a child might make you eligible for the Child Tax Credit. Buying a house could open the door to deductions for mortgage interest or property taxes. And starting a side hustle means thinking about self-employment taxes and business expense deductions.

Planning ahead can help you avoid being caught off guard and ensure you can take advantage of all available credits and deductions. If you’re not sure what changes might affect your tax return, this is a great time to connect with a tax professional. They can help you understand how to prepare and what records to start gathering now.

In Conclusion

Planning isn’t just for the ultra-organized or financially savvy. It’s for anyone who wants to reduce stress, maximize their deductions, and avoid costly mistakes when tax time rolls around. Whether you adjust your withholdings, contribute to your IRA, or simply start saving your receipts in one place, you’ll be doing your future self a favor.

If you’re not sure where to start, consider scheduling a mid-year tax check-in with a tax professional or using online tools. Even if you only apply one or two of these tips, you’ll be a step ahead, and your future self will thank you for it next tax season.