By Rick Waechter, Founder

Now that you have either filed your 2025 taxes or extended, the temptation is not to think about taxes for a few months at least.

Resist that urge.

With memory fresh in your mind, over the next month or so, review your taxes and ask yourself what lessons you learned which can help reduce your bill next year, or make the filing process less painful, or – most importantly – set yourself up for a lower lifetime tax bill.

Over the next 45 days, we will review each client’s returns for opportunities to make changes in 2026 and beyond. You should expect the same of yourself or your advisor.

Below is a list of possible lessons. Everyone’s situation is unique.

• Your tax bill was unexpectedly high due to taxable capital gains. Potential solution: sell funds which trade excessively, or if you were doing the trading, consider a less active strategy.
• You owed a penalty because your paycheck withholding and estimated quarterly payment were insufficient. Potential solution: bump up paycheck withholding or estimated payments.
• Your tax bill was unexpectedly high because of RSU (restricted stock) vesting. Potential solution: estimated tax payments or higher withholding. Companies typically withhold 22% for tax on RSU vesting unless vesting exceeds $1 million. That 22% rate can be too low for many taxpayers.
• Because of unexpectedly high gross income, you were limited to a $10,000 SALT (state and local tax) deduction, compared to the $40,000 available at lower income levels. Potential solution: lower capital gains (see above) or contribute more to retirement accounts (see below).
• Because of unexpectedly high gross income, your Medicare premium will increase significantly next year. Potential solution: lower capital gains (see above) or contribute more to retirement accounts (see below).
• You missed an opportunity to lower your tax bill because you did not max out your 401k deferral ($23,500, or $31,000 if you were 50+ in 2025). Potential solution: bump up automatic paycheck deferrals.
• You missed an opportunity to lower your tax bill by deferring self-employment income into a SEP IRA or individual 401k. Those deferral limits in 2025 were up to $81,250, depending on your income and age. Potential solution: plan better.
• Your charitable giving created no tax deduction because your itemized deductions were lower than the standard deduction. Potential solution: open a donor-advised fund (DAF) and make a large contribution into it the DAF to “lump” gifts into one year.
• Your tax prep took a lot of time because you own so many brokerage accounts or private investments that finding the right documents was onerous. Potential solution: consolidate accounts and declutter.
• Tracking down your charitable giving receipts took a lot of time. Potential solution: give only from your DAF.

No one likes paying tax, and no one likes filing their taxes. Be proactive to reduce your tax bill wherever possible and make April 15 less burdensome.