Your favorite season is fast approaching. That’s right — it’s nearly time to file state and federal tax returns.
The 2025 tax filing deadline is April 15. If you’re curious how to prepare for tax season like a champ, we’ve got a handful of simple strategies to help you avoid common missteps. We’ll even share some quick tactics to help you pay less and earn lots of rewards along the way.
1. Ensure that your Personal Information is Correct
You might not think this detail is worth a mention — but it is. It stung me in my early adult life and resulted in hundreds of dollars in penalties.
The IRS isn’t responsible for keeping track of your life changes. For example, if you move, you should tell the IRS immediately by either calling or filling out a change-of-address form. That’s because the IRS reaches you primarily through the mail. If it sends you a letter, you need to get it. It may be time sensitive, say, about a discrepancy on your previous tax return. You may be penalized if you don’t respond.
2. Assess Whether you’re in Over your Head
Nowadays, taxes aren’t as mind-numbing as they once were. Most folks can handle their own returns with the help of tax filing software like TurboTax. It serves as an interactive questionnaire to help you meet your filing requirements and lower the amount you owe.
But for some, particularly those that own a business or are heavily involved with multiple types of investments, it can be wise to let tax professionals do the work for you. Even if you simply want the peace of mind that comes with knowing you didn’t make a mistake, turn your paperwork over to a tax preparer.
3. Quarantine your Business Expenses from your Personal Expenses
A (potentially) massive headache for business owners during tax season is identifying business purchases among personal spending. Especially if you’ve only got a side gig or small sole proprietorship, you may tend to use the same credit card to fill up your business vehicle as you do your personal vehicle. This makes it difficult to spot the expenses you can claim to reduce your taxable income.
A simple way to avoid the confusion is by opening and using a business credit card for all your business-related purchases. Then, when it’s time to file a federal tax return, you can pull up your business card’s statement and easily locate relevant purchases.
4. Lower your Taxable Income with Strategic Contributions
Contributing to tax-advantaged accounts, such as retirement accounts and medical savings accounts, is a smart use of your money — but it’s also a great way to lower your taxable income.
For example: In 2025, singles can contribute $4,300 to a Health Savings Account (HSA) — and families can contribute $8,550. You can buy lots of everyday items with the money you deposit into an HSA, including sunscreen, over-the-counter drugs like ibuprofen, contact lens solution, feminine hygiene products like tampons, even eligible pillows.
5. Keep Track of Referral Bonuses you’ve Earned
“Referral bonuses” are a taxable item that routinely flies under the radar. You may receive these bonuses by sharing a unique code with friends and family that rewards you when they open a bank account or credit card.
Welcome bonuses themselves aren’t taxable; if you open a new bank account and receive a few hundred dollars, you won’t have to claim that on your tax return. It’s like a gift. But referral bonuses are taxable. That’s because the bank is effectively paying you a commission for recruiting a new customer. The bank should mail you a tax document with the info you need, but they’re easy to miss — especially if you’re not expecting it.
Neglecting to report these bonuses could result in penalties and interest until you’ve paid what you owe.
6. Watch for Common Scams
Fraudsters know that tax season is a bewildering and intimidating time of year for many folks — and they capitalize on it by posing as the IRS or another “official” entity to convince you to part with your personal information.
As previously mentioned, the IRS’s medium of choice when contacting you is through the mail. It won’t email, call, or text you for information. If someone from the IRS reaches out to you through any of these mediums, your spidey sense should tingle. Call the IRS instead of responding to the message — and never click through a link that was emailed to you.
Disclaimer: The information contained within this article, including any references to companies or products, are for informational and educational purposes only and are not a substitute for individualized financial and/or legal advice. We are not a credit repair organization as defined under federal or state law and we do not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit. We make no representation that we will improve or attempt to improve your credit record, history, or rating through the use of the resources provided through the FreshStart Blog or CreditFresh website. The views and opinions expressed by any guest contributors, as applicable, are solely those of the author and do not reflect the views of CreditFresh.
