Things to Do Now to Prepare for Tax Season (And Snag Last-Minute Deductions for 2025)

Tax season has a way of sneaking up on even the most organized adults. One minute you are ringing in the New Year, the next minute you are wondering why you own seven different folders labeled “tax stuff.” The good news is that a little prep right now can save you real money, real stress, and possibly a dramatic late-night receipt hunt in April.

Let’s walk through what you should do now to prepare for tax season, plus some legitimate last-minute deductions you can still take for the 2025 tax year. Knowledgeable, practical, and yes… a little witty, because taxes need all the help they can get.

Step One: Get Your Tax Life Organized (Future You Will Thank You)

Before deductions and credits, start with the basics. Organization is the least exciting step, but it is the foundation of everything else.

Do this now:

• Gather income documents like W-2s, 1099s, and investment statements.
• Create one digital folder and one physical folder. Label them clearly. Boring works.
• Track major life changes, marriage, divorce, new baby, home purchase, sale, or relocation.

If you bought or sold a home, refinanced, or made improvements, pull closing statements and receipts. Housing related deductions are often missed simply because paperwork is scattered.

Pro tip: If you cannot find a document in under 30 seconds, your system needs improvement.

Step Two: Check Your Withholding Before It Is Too Late

Many people assume taxes are purely reactive. They are not.

If you had a major income change in 2024 or early 2025, you may want to review your withholding now. Adjusting it early in the year can help you avoid a surprise bill next April or reduce how much you overpay.

According to Internal Revenue Service guidance, even small withholding changes can make a meaningful difference over the course of the year.

This step is especially important if you:

• Changed jobs
• Started freelancing or a side business
• Sold investments
• Bought or sold real estate

Step Three: Last-Minute Deductions You Can Still Take for 2025

Yes, there are still smart moves you can make that count for the 2025 tax year. These are completely legal and often underused.

1. Retirement Contributions

You can still contribute to certain retirement accounts up until the tax filing deadline.

Common options include:

• Traditional IRA contributions
• Spousal IRA contributions if one spouse does not work

These contributions may reduce your taxable income while also helping future you retire with slightly better snacks.

2. Health Savings Account Contributions

If you have a qualifying high-deductible health plan, make sure you contribute to a Health Savings Account in 2026 - and don’t forget to use those funds!

HSAs offer a rare triple benefit:

• Contributions may be tax deductible
• Growth is tax deferred
• Qualified withdrawals are tax free

That is tax efficiency with a cape.

3. Home Office Deduction (If You Actually Qualify)

If you are self-employed and use part of your home exclusively and regularly for business, this deduction may apply.

This includes:

• A percentage of mortgage interest or rent
• Utilities
• Internet
• Repairs related to the workspace

No, your couch does not count unless it is truly your office and not also where Netflix lives.

4. Energy-Efficient Home Improvements

If you installed qualifying energy-efficient upgrades, such as certain windows, insulation, or HVAC systems, you may qualify for tax credits.

Save invoices, product certifications, and installation dates. These credits can be meaningful and are often overlooked.

5. Charitable Contributions

Cash donations are the obvious one, but also consider:

• Non-cash donations like clothing or furniture
• Mileage driven for charitable activities
• Appreciated assets donated directly

Just make sure you have proper documentation. The IRS enjoys paperwork almost as much as it enjoys acronyms.

Step Four: Review Housing-Related Tax Items Carefully

Real estate transactions often create tax opportunities or obligations people miss.

If you bought a home:

• Mortgage is NOT deductible in 2025, but will be in 2026.
• Property taxes are deductible on your federal income tax return, but only if you itemize your deductions and adhere to the total annual cap on state and local taxes (SALT). 
• Points paid at closing may be deductible. However, the deduction is subject to specific IRS rules and depends on whether you itemize deductions on your tax return. The rules for deducting points vary depending on the purpose of the loan (purchase vs. refinance) and the property type (main home vs. second home). 

If you sold a home:

• You may qualify for capital gains exclusions
• Improvements can affect your cost basis
• Timing matters more than most people realize

This is one area where guessing is expensive. Precision pays.

Step Five: Decide If You Should DIY or Call a Pro

Some tax situations are simple. Others look simple until they are not.

Consider professional help if you:

• Own investment property
• Are self-employed
• Had multiple income streams
• Bought or sold real estate
• Want to optimize, not just file

A good tax professional does not just fill out forms. They help you think ahead so next year is easier.

Final Thoughts: A Little Planning Goes a Long Way

Preparing for tax season does not require panic, spreadsheets from the dark web, or cancelling all joy until April. It requires awareness, organization, and a few strategic moves made early.

The reward: fewer surprises, lower stress, and potentially more money staying where it belongs… with you.

If your tax situation involves a recent move, a home purchase, a sale, or plans for the year ahead, those decisions ripple into your financial picture. Getting the right guidance early makes everything smoother.

And remember, the best tax strategy is the one you actually implement.