I know – just by reading the title, you’re probably thinking, “this tax season just ended, why in the world should I start worrying about next year’s taxes already?” but regardless of how soon after the current tax season ends, it is always a good idea to be proactively thinking into the next. There are a few considerations and personal processes that you can utilize that can ensure the best possible outcome when it’s time to file for the 2026 tax year. Below, I’ll identify some things that may help you in preparing for next year’s tax filing season.
One of the best starting points in preparation for the upcoming tax year would be reviewing any notes, comments, or relevant advice on this year’s taxes that may have been prepared by your accountant, advisor, or applicable tax professional. There may be various points of information that could apply towards the following year’s taxes. Always feel free in reaching out to your preparer if you feel as if any of the information or comments provided by them should apply to next year’s return. One common, possibly applicable factor in many tax returns would be meeting federal and state safe harbor requirements through withholdings and making quarterly estimated payments throughout the year. Safe harbor is when the government tax collection agencies require you to pay taxes on your expected annual income throughout the year. This can be a tricky concept, so I’ll explain the numbers. Federally, between your withholdings and estimates paid, you must pay at least 90% of the income that you will owe in the current year OR 100% of the total tax you owed in the previous year, whichever is lower. If you make over $150,000, the latter figure jumps to 110%. If you do not meet these requirements through withholdings or estimated payments to the IRS, you may face underpayment penalties. Safe harbor is also something that states utilize, and while the concept is similar, rules and regulations will vary state to state.
Some other factors to keep in mind for the upcoming tax season would be any changes in income, having more or fewer qualified dependents that you may claim, any changes in marital status, residency changes, or expected retirement. If you have a change in income, you will want to ensure your withholdings are properly aligned with your expected tax burden for the year. If you have a change in qualifying dependents, you will want to prepare yourself for receiving more or less in tax credit amounts, as well as the impact dependents can have on your filing status. Marital status changes throughout the year may also affect your filing status. If you move, you may have to file tax returns in the multiple states in which you resided in, and follow applicable rules that each state could have. Retirement can create changes within your tax return as well, such as the introduction of social security income, Required Minimum Distributions from retirement accounts, and the reduction or elimination of wage income.
On a federal tax return, you will always either take a standard deduction or you will take an itemized deduction. You cannot do both. What does this mean and what does it have to do with the upcoming tax year? Well, these deductions occur on every return and their purpose is for the government to not tax your “discretionary” income. If you take a standard deduction, there will be a set amount that will not be taxed on your return. These amounts are based on filing status and are adjusted annually. It is typically likely that every year the standard deduction will adjust and be higher. Itemized deductions act in a similar manner, only you take specific “itemizable” expenses you may have throughout the year to deduct from your taxable income. Some itemizable expenses include mortgage interest paid, state and local taxes paid, charitable donations, unreimbursed medical expenses, real estate taxes paid, personal property taxes paid, etc. This can be a lot to track, so it is highly advisable that if you or your tax preparer believes you may itemize, receipts for these expenses should be kept throughout the year to account for them properly when the upcoming tax season arrives.
There are also a few legislative changes that will be in effect for the 2026 tax season that you may want to keep in mind. The One Big Beautiful Bill Act (OBBBA) was signed into effect in 2025, and many of the changes are already implemented. However, some of the changes are not in effect yet and they may apply to you. If you have any children born from Jan 1, 2025 – Dec 31, 2028, you will be able to file Form 4547 and apply for a “Trump Account” that will include $1,000 in seed money as an investment account for your child. Also, there will be an opportunity to deduct up to $1,000 in charitable contributions if you do not otherwise itemize, beginning in the 2026 tax season.
Keep in mind that these are just a few things to consider when preparing yourself for next year’s tax season, and that if you have any questions or concerns about anything regarding your tax situation, always reach out to your tax preparer.