By Jordan Jantz
It may seem as though 2026 has only just begun, but as the shine of the new year wears off, it’s already that dreaded time of year: tax time. However, with a little preparation, tax season can be much easier. Here are four things to start off tax season on the right foot.
1. Gather your records and always file.
Even if you didn’t have much happening financially in 2025, you should still file taxes. For one, the IRS requires most Americans to file. You can check the IRS’s website to see if you legally need to file. But even if you don’t, you should still file to claim any refund you are owed.
Any money that you earned by providing goods or services—whether from your 9-5 or from a side hustle selling sourdough—is taxable income, and you should prepare to report it to the IRS.
Similarly, if you have a side hustle and want to report expenses, now is the time to prepare proof of the expense. To deduct the mileage you drove your car to meet a client or the $20 you spent on envelopes and paper, you need documentation. For example, you need a log of those miles driven, where you drove, and the purpose of the trip, or the IRS won’t count them as a business expense.
So, when in doubt, hold onto all the forms you receive in the mail, track down your bank statements, and don’t shred your old receipts quite yet.
2. Hope for a refund (but don’t count on it yet)
Many working-class and middle-class Americans should expect a tax refund this year. Usually, a refund means you overpaid initially, but this year, the One Big Beautiful Bill (OBBB) made many of the tax cuts from 2017’s Tax Cuts and Jobs Act permanent. The OBBB cuts apply to income earned throughout all of 2025 but didn’t become law until late in the year, so most employers withheld more taxes from paychecks than necessary.
However, your individual situation may vary. Perhaps you worked a side hustle or had investments that paid out this year. Situations like these will not automatically be included in your employer withholding. As a result, it’s smart to plan some buffer room into your budget in case you end up owing more. Now’s a good time to start setting aside a little money each week so you’re not blindsided when you file.
3. Investigate the OBBB tax cuts and credits.
Speaking of the OBBB, there are several new tax cuts you may benefit from. No tax on tips or overtime are two that have made headlines, but the tax code is always more complicated than a short headline. It’s always worth double-checking whether a specific rule applies to your unique situation before you get your hopes up.
Nevertheless, there are a few specific deductions and credits that are worth mentioning:
- A deduction for interest paid on new cars purchased in 2025
- A bigger deduction for state and local taxes
- $1,000 U.S. Treasury contribution upon opening a Trump Account
- No tax on tips or overtime
If any of these sound like they could apply to you, be sure to investigate, as they could save you a pretty penny come Tax Day.
4. Make any last-minute retirement contributions for 2025.
If you were lucky enough to get a Christmas bonus or find yourself with a little extra cash after the holidays, now is a great time to store away extra money for retirement—or get started by opening an Individual Retirement Account (IRA).
An IRA is different than a company-sponsored retirement account (though you can still open an IRA even if you have a company-sponsored retirement option). You’ve probably heard of the most common type of IRA, a Roth IRA. Unlike a 401(k), you must pay income tax on the money you earn before it goes into the Roth, but when you retire, you don’t have to pay taxes on the money you withdraw from the account.
If you’re in a lower tax bracket or early in your career, this is a fantastic way to start saving for retirement, and you have until April 15, 2026, to contribute for 2025 up to the limit. If you’re younger than 50 years old, you can add up to $7,000 to your Roth, and if you’re 50 or older, you can contribute $8,000.
Ready for April 15?
Take a deep breath, and remember you’ve still got a few months to prepare. Hang onto your tax forms as they arrive in the mail. Look back on the year and see if you have any self-employment income or possible deductions. Check your bank account and see if you want to make any final IRA contributions. Then, before April 15, be sure to file. You’ve got this!
ABOUT THE AUTHOR
Jordan Jantz is a freelance writer, editor, and website designer as well as the assistant editor at IW Features. Her work has spanned the nonprofit, small business, and scholarly worlds, but most of all, she is passionate about uplifting the message of hope and freedom. Find her at jantzwriting.com.
