Although I am no longer a practicing CPA, here are 7 Practical Steps to File Your 2025 Tax Return. And if you are looking for more financial guidance, do not miss the 6 Easy Ways a Financial Advisor Can Add Value.
1)Expect Delays with the IRS
The IRS, like many other government agencies, has its issues. First, lets start at the top, there has been seven IRS Commissioners, or Acting Commissioners in just the first eight months of 2025.
Let that sink in.
The current IRS Acting Commissioner is Scott Bessent. At the same time, he is also the Secretary of the Treasury.
I’m just wondering, does he get two paychecks?
Second, in 2025, the IRS lost about 25,000 employees. This was due to both early retirement and employees taking the buyout incentive. Before this, the IRS had about 79,000 employees. Now they have about 54,000 employees.
Said differently, the headcount is down almost 32%. Yikes!
Third, the government shutdown. Regrettably, this became the longest government shutdown ever at 44 days. Fortunately, the shutdown ended in mid November, 2025. However, the affects of the shutdown, difficult as it may be to quantify, will linger on for a period of time.
2)Gather All of Your Income Tax Material
I am sorry for the blinding glimpse of the obvious. That said, gathering all your income tax materials is particularly important.
Employers must issue your 2025 Form W-2 to you by January 31, 2026. In our prior experience as practicing CPA’s, this never was an issue with our clients receiving these timely.
In theory, custodians are required to issue the 2025 IRS Form 1099-INT (for interest) and 1099-DIV (for dividends) by January 31, 2026. IRS Form 1099-B (for security sales) is due on February 15, 2026.
That said, most custodians request an extension of time to file IRS Form 1099 and are granted this extension. The reality is sometimes Form 1099 does not show up until mid or late March. This can make it challenging to file on the due date of April 15th.
Income Tax Organizer
The easiest way to gather your documents is to review and complete the income tax organizer that your CPA sent to you. Typically, they will either mail this or send this electronically in early January. This organizer will list all the items used to prepare your prior year’s income tax return.
If your CPA does not provide you with an income tax organizer, review your 2024 income tax return and make a list of all the items that were needed to prepare your 2025 tax return.
3)Make an Appointment with Your CPA
After you have gathered the preponderance of your materials, make an appointment with your CPA. Be aware that many CPA’s set a cutoff date by which they can reasonably project that your income tax return will be filed timely and will not go on extension. Although the cutoff date can vary from one firm to another, many seem to use March 15th as the common deadline.
In this appointment, it is the opportunity to highlight any specific differences from your prior year’s income tax return. This will give your CPA a heads up as to what changes to be looking for. It is also the time to ask any specific questions you may have with regards to the filing of your return. Ideally, you would e-mail your questions before the meeting. This will give your CPA time to prepare for them. One question all taxpayers should consider asking their CPA is How the New SALT Deductions Can Save You Taxes.
Estimated Tax Payments
Be clear with your CPA about what estimated tax payments you made. The IRS does not publish what percentage of IRS correspondence is due to a mismatch of estimated taxes paid and claimed on the return versus what their records indicate. That is fine.
However, when I was practicing CPA, the percentage of correspondence related to estimated tax payments was significant.
We recommend you use the IRS online tool to pay your individual estimated taxes (and any balance due) at Online Account for Individuals. Connecticut taxpayers should use the Connecticut online tool at myconneCT.
For those who are still mailing in your estimated tax payments, we recommend sending them:
Certified Mail, Return Receipt Requested.
For the cost of about $10, you have proof of mailing and proof of delivery. This is a minor investment to get this reassurance.
4)Take Advantage of All of Your Income Tax Deductions
Individual income taxpayer’s report on the cash basis of accounting. This means whatever taxable income you received and whatever income tax deductions you incurred during the tax year 2025, is the basis of what is used to calculate your income tax.
However, there are exceptions to this general rule. If you are eligible, you can contribute to Traditional IRAs, Roth IRAs, and Health Savings Accounts, up to the due date of your return, April 15, 2026. If you are interested in IRAs and Roth IRAs, check out IRA versus Roth IRA. What You Need to Know, and 3 Easy Reasons to Open a Roth IRA. Additionally, here are 3 Great Reasons to Fund a Health Savings Account.
It is important to remember that, “I Love Paying Taxes.” Said No One, Ever!
5)If Necessary, File for an Income Tax Return Extension
For many reasons, it may not be practical to file by the deadline of April 15th. One of the biggest reasons that you may not be able to file by the deadline is that you are still waiting for tax documents. The tax document that many are waiting for is a so-called IRS Form K-1. This K-1 Form is issued by partnerships, subchapter S corporations, estates, and trusts.
If you do not have all your documents, your CPA will have to file an income tax extension return for you. This extension will allow you for six months or until October 15th, 2026, to file your income tax return. It is important to understand:
The extension extends the time to file your income tax; it does not extend the time to pay the tax.
Draft Income Tax Return
Your CPA will need to prepare a draft income tax return based on the material you have provided them so they can prepare the extension. Based upon this draft tax return, if there is a balance due, the tax will need to be paid with the filing of the extension. Failure to pay this tax by the due date, April 15th, 2026, will result in interest and penalties being added to the tax due.
If you go on extension, and have a balance due, you will likely need to pay 2026 estimated income taxes. If so, your CPA should give you a schedule to pay the 2026 estimated income taxes.
The interest and penalties for not paying on time are significant. The IRS interest rate is adjusted quarterly. The current interest rate for the first quarter of 2026 is 7%, the same as it was throughout 2025. The interest rate is compounded daily, which makes it extremely expensive. The past due payment penalty is 0.5% of the unpaid tax per month, up to 25%.
For Connecticut income taxpayers, the interest is 1% per month, on the unpaid balance. The past due payment penalty is 10% of the unpaid tax.
Pay your income tax on time to avoid this interest and penalties.
6)Carefully Review Your Income Tax Return Before Signing Off on It
Again, I am sorry to be stating the obvious. While you, and your CPA, want to get the income tax return filed, it is appropriate to slow down and review the tax return. Keep in mind:
It is your income tax return.
While you may have engaged your CPA to prepare it, it is your income tax return, and you need to take ownership of it.
You do this by, you, and your spouse, if you have one, reviewing your income tax returns. Oh, and do not be afraid to ask questions from your CPA about things you do not understand.
Income tax returns can become complicated. It is not your job to understand the tax code and all the regulations behind it. That is the CPA’s job. Having said that, it is your job to understand your tax return and inquire about any specific questions you may have with your CPA.
You will need to sign IRS Form 8879, IRS e-file Signature Authorization. Your CPA can not electronically file your income tax return without this form being signed.
7)Plan for Your 2026 Tax Year
Regardless of whether you filed your 2025 income tax return on time or filed for an extension, it is the time to begin planning for your 2026 tax year. There is an expression:
The only thing we can count on is change.
Amen. This is particularly true with income tax law. In 2025, President Trump signed One Big Beautiful Bill Act (OBBBA). This made significant changes to the income tax rules. Far too many to mention here.
While year end tax planning is a must, getting out in front of your planning in the first third of the year is important and then everyone should know the Practical Financial Moves for the Second Half of the Year.
Conclusion
If you need help with 7 Practical Steps to File Your 2025 Tax Return, call Thomas F. Scanlon, CFP®, CPA at (860) 645-1515 or E-Mail Thomas.scanlon@raymondjames.com.
This is original content prepared by Manchester, CT Financial Advisor, Thomas F. Scanlon, CFP®, CPA.
The information contained in this report does not purport to be a complete description of the securities, markets or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Thomas F. Scanlon, CPA, CFP® and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and subject to change.
Changes in tax laws or regulations may occur at any time and could substantially impact your situation. While familiar with the tax provisions of the issues presented herein, Raymond James Financial Advisors are not qualified to render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional. Investing involves risk and investors may incur a profit or a loss.
IRAs:
Contributions to a traditional IRA may be tax-deductible depending on the taxpayer’s income, tax filing status, and other factors. Withdrawal of pre-tax contributions and / or earnings will be subject to ordinary income tax and, if taken prior to age 59 ½, may be subject to a10% federal tax penalty.
Roth IRA:
Like traditional IRA’s, contribution limits may apply to Roth IRA. In addition, with a Roth IRA, your allowable contribution may be reduced or eliminated if your annual income exceeds certain limits. Contributions to a Roth IRA are never tax deductible, but if certain conditions are met, distributions will be completely income tax free. Roth IRA owners must be 59 1/2 or older and have held the IRA for five years before tax-free withdrawals are permitted.