Tax Time Checklist: What to Think About Based on Your Tax Bracket in 2025

Tax Time Checklist: What to Think About Based on Your Tax Bracket in 2025

👉How would it feel to know exactly when you can retire and how much you can spend without running out of money? Let’s talk. In a complimentary call, I’ll walk you through your numbers and show you strategies that could help you retire with more confidence and less stress. Schedule Your Call

Why Listen to Me?

Taxes aren’t just about April 15th. In my experience, they touch every aspect of your financial life—how you invest, how you save, and how much you ultimately get to keep. As a Certified Financial Planner™, I’ve worked with investors across multiple tax brackets, helping them find smart, legal ways to reduce their tax liability while making sure their money is working for them, not just Uncle Sam.

What You’ll Learn in This Guide:
The difference between a W-2 and a tax return (and why so many people confuse them)
How to get your 1040 (whether through H&R Block, TurboTax, a CPA, or the IRS)
What you need to think about based on your tax bracket
Common tax mistakes people make—and how to avoid them
Steps you can take right now to improve your tax situation for next year

Taxes don’t have to be overwhelming. Let’s break it down.

What’s the Difference Between a W-2 and a Tax Return?
Many people confuse a W-2 form with a tax return, but they’re completely different. Let’s clear it up:
A W-2 (Wage and Tax Statement) is a form your employer gives you at the beginning of the year. It shows how much you earned and how much tax was withheld.

A Tax Return (Form 1040) is the actual document you file with the IRS to report your income, deductions, credits, and ultimately, to determine if you owe taxes or get a refund.

How Do You Get Your 1040?
Your 1040 doesn’t just “show up” like a W-2. You have to prepare and file it yourself using one of the following:
H&R Block / TurboTax: Best for people with simple returns who want DIY software.
A CPA or Tax Professional: Ideal if you have a complex return, own a business, or want tax planning advice.

The IRS Website (Free File Program): A free option for people with low-to-moderate income or very simple tax situations.

Once filed, you can get a copy of your 1040 by:

Logging into your tax software account (H&R Block, TurboTax, etc.).

Requesting a Tax Return Transcript from the IRS at irs.gov.

Key Tax Considerations Based on Your Tax Bracket

Taxes aren’t one-size-fits-all. What you need to think about depends on your income level. Let’s break it down:

🟢 If You Make Under $50,000

Maximize tax credits like the Earned Income Tax Credit (EITC) and Child Tax Credit.
Consider a Roth IRA—at this income level, you’re likely in a lower tax bracket now than you will be in the future.
Use the standard deduction ($14,600 for single filers, $29,200 for married couples in 2025) to reduce taxable income.
Avoid underpayment penalties by ensuring enough tax is withheld.

Explore state tax credits that may reduce your overall liability.

🟡 If You Make Between $50,000 – $150,000

Take advantage of pre-tax savings like 401(k)s and HSAs to lower taxable income.
Watch out for phaseouts on deductions and credits as your income rises.
Optimize capital gains taxes by using tax-efficient investment strategies.
Consider Roth conversions if you expect your tax rate to rise in retirement.

Utilize tax-loss harvesting to offset gains from investments.

🔴 If You Make Over $150,000

Tax bracket management is key—consider Roth conversions and tax-efficient withdrawals.
Charitable giving strategies can help lower taxable income (donor-advised funds, QCDs for retirees).
Review your business deductions if you’re self-employed.
Avoid the net investment income tax (NIIT) by structuring investments wisely.

Plan for the Alternative Minimum Tax (AMT) if you have high deductions.

Common Tax Mistakes (And How to Avoid Them)

❌ Not adjusting your withholdings – If you owed a large tax bill or got a massive refund last year, it’s time to tweak your W-4. ❌ Missing out on deductions – Many people don’t realize things like student loan interest, HSA contributions, and home office expenses can lower taxes. ❌ Ignoring tax-efficient investing – Placing high-tax investments in taxable accounts instead of tax-advantaged accounts can cost you thousands over time. ❌ Failing to take Required Minimum Distributions (RMDs) – If you’re over 73, missing an RMD can result in hefty penalties.

The Big Picture: How to Make Tax Time Easier

👉 Track deductions year-round (don’t scramble in April!). 👉 Use a tax-advantaged savings strategy (401(k), IRA, HSA, etc.). 👉 Review your tax return with a financial advisor to spot future opportunities. 👉 Stay updated on tax law changes that could impact your strategy. 👉 Consider working with a tax professional to ensure compliance and optimization.

How would it feel to know exactly when you can retire and how much you can spend without running out of money? Kind of crazy that you just found this blog… and your next step might be booking a complimentary call. In that call, we’ll explore your numbers and see what’s truly possible for you. Schedule Your Call

FAQs
1️⃣ What happens if I don’t file my tax return?
If you owe taxes and don’t file, penalties and interest will add up fast. If you’re due a refund, you won’t get your money until you file.
2️⃣ What’s the best way to lower my taxable income?
Max out 401(k) contributions ($23,500 in 2025), use an HSA if eligible, and consider charitable giving strategies.
3️⃣ Can I file taxes for free?

Yes! The IRS Free File program lets people under a certain income threshold file for free. DIY tax software may also be free if you have a simple return.


Disclaimer: Case studies are hypothetical and do not relate to an actual client of Lock Wealth Management. Clients or potential clients should not interpret any part of the content as a guarantee of achieving similar results or satisfaction if they engage Lock Wealth Management for investment advisory services.