How to Get Ahead for the 2025 Tax Season: Common Mistakes to Avoid

As the new year approaches, it's the perfect time to make sure you're on track for a smooth tax season.

Whether you're filing on your own or working with a professional, early preparation can help you avoid stress, reduce the risk of errors, and even uncover potential savings. Here are some of the most common tax preparation issues individuals face, and how to stay ahead of them for 2025.

1. Disorganized Financial Records

One of the biggest obstacles to accurate and timely filing is disorganized documentation. Missing receipts, misplaced W-2s or 1099s, and incomplete bank statements can delay your return or lead to inaccurate filings.

Start now by setting up a digital or physical folder labeled "2025 Taxes" and drop in documents as they arrive. Many tax documents start arriving in January, but organizing your income, deductions, and major expenses from 2024 now will save headaches later.

2. Overlooking Income Sources and Tax Forms

More people are working side gigs, freelancing, or earning income from investments. These non-traditional income streams often go unreported, either due to oversight or misunderstanding. It's essential to track all forms of income and ensure you receive the correct tax forms:

• W-2 Forms: Employers are required to provide W-2s by January 31, 2025. These forms report your wages and the taxes withheld. If you haven’t received your W-2 by early February, check your company’s payroll portal or contact your HR department.

• 1099 Forms: There are multiple types of 1099s. Common ones include:

  • 1099-NEC for contract or freelance work (due by January 31, 2025).

  • 1099-MISC for miscellaneous income.

  • 1099-INT, 1099-DIV, or 1099-B for interest, dividends, and investment sales (usually sent by February 15).

  • 1099-K for payment card and third-party network transactions, especially from platforms like PayPal or Venmo, if your income exceeds the IRS threshold.

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You can typically access these forms via your bank, brokerage account, or payment app dashboard. Review these portals in early February to make sure you haven’t missed anything.

Make a list now of all income sources from 2024, including self-employment, rental income, or stock sales, so nothing slips through the cracks.

3. Ignoring Changes in Tax Law

Tax law evolves, and missing key updates can cost you. For tax year 2025, watch for any changes to standard deductions, credit eligibility, or reporting requirements.

For example, the no tax on tips and overtime has thrown a wrnech into documentation because the W-2 form has not been updated to reflect these numbers, meaning employees not only have their W-2, but the final paystub of the year which would report the years tips and ovetime numbers.

Staying informed through a trusted CPA or IRS resources can help you plan smarter.

4. Missing Out on Deductions and Credits

Many individuals leave money on the table simply because they don't know what they're eligible to claim. Commonly missed items include student loan interest, educator expenses, charitable contributions, and medical costs. If you experienced a major life event in 2024, such as marriage, a new child, home purchase, or job change, you may qualify for new credits or deductions.

Talk to a tax advisor now to understand what documentation you should be gathering.

5. Waiting Too Long to File

Procrastination is a common tax trap. Waiting until the last minute limits your options and increases the chances of mistakes. It also leaves little time to resolve surprises, like a missing form or an unexpected tax bill. The earlier you prepare, the more control you have.

Especially as the IRS becomes even more woefully understaffed and fragmented, running into an unexpected issue in mid April could be a frustrating experience for taxpayers. Consider setting a goal to finalize your documents by mid-February and schedule a filing appointment or online submission soon after.

Final Thoughts

Tax season doesn’t have to be stressful. A little preparation now goes a long way toward a smoother filing process.

At Pathfinder, we help individuals navigate the complexities of the tax code and maximize their returns with confidence. If you're unsure about your situation or want expert guidance, reach out to our team today. Let’s make 2025 the year you file early, accurately, and stress-free.