Most taxpayers avoid thinking about taxes until the April deadline approaches each year. Unfortunately, it may be too late to seize certain advantages that increase a refund or decrease the amount owed. You can prepare now by reviewing these tasks.
Check Your Individual Taxpayer Identification Number
The IRS provides Individual Taxpayer Identification Numbers (ITINs) to individuals who need a U.S. taxpayer identification number but do not qualify for a Social Security number. Your ITIN remains valid as long as it is used at least once every three years. Therefore, if your ITIN was not on a federal tax return for tax years 2021, 2022, 2023, it expired on December 31, 2023. You only need to renew the ITIN if it has expired and is required on your federal tax return.
Maximize Salary Deferral Contributions
Taxpayers can contribute to a retirement plan through salary deferrals to help reduce taxable income. Your total salary deferral contributions should not exceed the $23,000 limit for 2024 and $23,500 for 2025.
Donate to Charity
Most charitable cash donations to tax-exempt organizations qualify for a deduction. However, there are some exceptions. Cash contributions include checks, credit cards, debit cards, or unreimbursed out-of-pocket expenses for volunteer services to a qualifying charitable organization.
For IRA owners aged 70½ or older, Qualified Charitable Distributions (QCDs) allow tax-free transfers of up to $100,000 to charities. For those aged 73 and older, QCDs count toward required minimum distributions (RMDs).
Set Up Direct Deposit
Filing electronically and selecting direct deposit ensures faster refund access while avoiding issues with lost or stolen paper checks. It also bypasses the possibility a refund check could be lost, stolen, or returned to the IRS as undeliverable. Those without a bank account can learn how to open an account at an FDIC-insured bank or through the National Credit Union Locator Tool. Veterans should see the Veterans Benefits Banking Program to access financial services at participating banks.
Think About Tax Refunds
Numerous factors can affect the timing of a refund after the IRS receives a return. Although the IRS issues most refunds in less than 21 days, some returns require additional review and take longer to process if IRS systems detect a possible error, missing information, or suspected identity theft or fraud. Therefore, the IRS cautions taxpayers not to rely on receiving a 2024 federal tax refund by a specific date, especially when making major purchases or paying bills.
Simplify Taxes with TaxCaddy
Berman Hopkins is on a mission to make the tax season experience easier and more secure for our clients by using TaxCaddy. This innovative platform offers you an efficient way to connect with our tax advisors, share sensitive documents and information, and sign e-file authorization forms—all from the convenience of your computer, smartphone, or tablet.
Here to Help for the 2025 Tax Season
Navigating tax regulations can be complex, and every situation is unique. By providing your information to us as soon as possible, we can help you identify potential tax-saving opportunities, avoid last-minute stress, and streamline the filing process during the 2025 tax season.
If you have any questions, we are here to help. We build value-added relationships with each client to understand their business structure and provide solid solutions. Our approach offers direct access to the firm's decision-makers. Our innovative cross-functional services help businesses address the challenges ahead.
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