Tax Filing: Are You Ready?

If you're like most taxpayers, you probably have a growing stack of tax forms and receipts on your desk as we approach tax season. While it might be tempting to put off the day of reckoning, Tax Day will be here before you know it. And the sooner you start organizing your return, the less stress you're likely to feel as the tax filing deadline approaches.

Here's a handy reminder of what you'll need to prepare, along with some tips for avoiding costly mistakes.

Filing taxes usually goes hand in hand with tax forms—whether paper or electronic. Depending on your individual situation, you may receive a lot of them. That's reason enough for starting early—if you find you're missing one, you'll want to give yourself plenty of time to track it down.

Your specific financial circumstances will determine which forms you receive each year, but here are some of the most common IRS forms to be aware of and a brief description of their purpose:

• W-2: Used by employers to report total annual compensation, payroll taxes, contributions to retirement accounts, and other wage information.
• 1098: Used by lenders to report mortgage interest, mortgage insurance premiums, and any points you might be able to deduct during the tax year.
• 1098-E: Used by lenders to report interest paid on student loans.
• 1098-T: Used by educational institutions to report payments for qualified tuition and related expenses, and scholarship or grant amounts.
• 1099-B: Used by financial institutions to report proceeds from sales of securities and other financial instruments to help investors track their capital gains or losses.
• 1099-DIV: Used by financial institutions to report dividends and other distributions.
• 1099-INT: Used by financial institutions to report interest income.
• 1099-MISC: Used by businesses and payers to report royalties, rents, prizes, rewards, and other miscellaneous income.
• 1099-NEC: Used by hiring agencies or companies to report payments to independent contractors, freelancers, and other nonemployees.
• 1099-R: Used by financial institutions to report distributions from retirement accounts, pensions, annuities, insurance contracts, profit-sharing plans and other similar financial products.
• SSA-1099: Used by the Social Security Administration to report Social Security benefits.

When you receive any form, check it for errors. If you find any, ask the responsible party to correct them as soon as possible or your tax return could be held up.

If your deductions exceed the standard deduction for 2025—$15,750 for a single filer, $23,625 for head of household, and $31,500 for joint filers—it makes sense to itemize them so you can keep more of your earnings. (For those 65 or older or blind, there is an additional $1,600 deduction if you are married or $2,000 if you're unmarried.)

Also, the One Big Beautiful Bill Act introduced several new tax deductions starting this year, which you can use whether you itemize or not. These include:

• Senior Tax Deduction of up to $6,000 for those 65 or older, or $12,000 for qualified married couples
• Tips Income Deduction of up to $25,000 per household
• Overtime Income Deduction of up to $12,500 per person (with a maximum amount of $25,000 for joint filers)
• Auto Loan Interest Deduction of up to $10,000 for a new car purchase

Note, however, that these new tax deductions are subject to various limitations such as phase outs based on your income. They are also temporary: unless they are extended, they will expire after 2028.

If you do end up itemizing, you'll need to have proof in the form of receipts and other documentation to support your figures. You don't have to submit the receipts with your tax return, but you'll need them in case you're audited by the IRS. And you don't want to be caught without them, so be sure to save them for at least seven years. If you lost or didn't save some of this information, don't fret—you may be able to use other documents, such as credit card statements or canceled checks, as evidence during an audit. 

Sometimes filing on time just isn't possible. Unexpected events can interfere with your ability to file, as can delays in receiving tax forms.

Your 2025 return will be due April 15. If you think you might miss the deadline, you can file for an extension, giving you until October 15 to complete your return. But keep in mind, you still need to estimate and pay any taxes you owe by Tax Day to avoid possible penalties. 

Finally, be mindful of common issues that often trip up taxpayers. During the eight years I spent at the IRS before joining Schwab, I saw taxpayers make the same mistakes over and over again. Using tax-preparation software can increase the overall accuracy of your return and help identify all the deductions you may be entitled to. But even the best tax software won't catch basic inputting errors.

If you realize you filed your return with a mistake or forgot to include something, file an amended return as soon as possible. And it's always a good idea to call for back-up—consider enlisting a tax professional who can answer specific questions, give your return a second look, or even prepare it from start to finish.