• How to Prepare for Tax Season: Early Moves to Make This Year

    Early Steps to Simplify Filing and Align Your Tax Strategy

    Tax season just began January 27th, but starting early can help streamline the process and reduce stress when deadlines approach. By organizing your financial information and planning ahead, you can identify opportunities to align your tax strategy with your overall financial goals. In this article, we’ll discuss tax season preparation and share some early moves to consider as you prepare for tax season this year.

    1. Organize Your Financial Documents

    Gathering your financial documents early can help you avoid last-minute scrambling. Essential documents may include:

    • W-2s or 1099 forms to report income.
    • Statements for investment accounts, retirement plans, and health savings accounts.
    • Records of charitable donations or deductible expenses.
    • Receipts for major purchases that may qualify for tax deductions or credits.

    If you’ve made changes to your financial situation this year—such as selling a property, starting a new job, or adjusting your investment portfolio—make sure to collect the necessary documentation to reflect those changes.

    2. Review Your Withholding and Estimated Tax Payments

    It’s a good idea to review your tax withholding or estimated tax payments well before the end of the year. If you’ve experienced significant life changes, such as a marriage, divorce, or the birth of a child, these events could affect your tax liability. Adjusting your withholding now can help you avoid overpaying or underpaying taxes.

    For those who pay estimated taxes, check whether your payments are on track to meet your expected liability. This can help you avoid potential penalties for underpayment.

    3. Evaluate Contributions to Tax-Advantaged Accounts

    Tax-advantaged accounts, such as 401(k)s, IRAs, and health savings accounts (HSAs), offer potential benefits when it comes to tax planning. As the year progresses, consider whether you are on track to meet your contribution goals for these accounts:

    • 401(k) and IRA Contributions: Contributions to traditional accounts may reduce taxable income, while Roth accounts provide potential for tax-free growth.
    • HSA Contributions: If you’re eligible, contributing to an HSA can provide tax benefits for qualified medical expenses.

    By contributing as much as possible before deadlines, you can align your retirement and healthcare savings goals with tax planning strategies.

    Related: 2025 Key Financial Data and Reference Guides

    4. Track Potential Deductions and Credits

    Deductions and credits can play a significant role in your tax liability, so it’s helpful to track eligible expenses throughout the year. Common areas to review include:

    • Charitable donations, including cash contributions and donated goods.
    • Medical expenses, if they exceed a certain percentage of your income.
    • Education-related expenses, such as tuition payments or student loan interest.

    Keep detailed records and receipts to substantiate these claims when filing your return.

    5. Consider Tax-Loss Harvesting

    If you’ve experienced losses in your investment portfolio, tax-loss harvesting may help offset gains in other areas. By selling certain investments at a loss, you can potentially reduce taxable income while rebalancing your portfolio.

    This approach requires careful planning to avoid wash sale rules, which could disqualify the tax benefits. Consulting with a financial professional can help ensure the process aligns with your overall investment and tax strategies.

    6. Understand Changes to Tax Laws

    Tax laws can change from year to year, so part of tax season preparation is staying informed about updates. For example, new legislation may affect contribution limits, tax brackets, or deductions and credits.

    This year, be aware of any updates stemming from the SECURE Act 2.0, which introduced changes to retirement account rules, or other legislation that could impact your tax strategy.

    7. Review Your Business Finances (If Applicable)

    For small business owners or self-employed individuals, tax planning involves additional considerations. Some steps to take include:

    • Reviewing eligible business deductions, such as home office expenses or equipment purchases.
    • Ensuring proper record-keeping for income and expenses.
    • Evaluating whether quarterly estimated tax payments align with your earnings.

    Working with a tax professional can help you identify opportunities specific to your business structure.

    8. Plan for Required Minimum Distributions (RMDs)

    If you’re required to take RMDs from tax-deferred accounts, make sure to incorporate them into your tax strategy. The timing and amount of these distributions can affect your taxable income, so it’s important to plan accordingly.

    Recent updates to RMD rules, including changes to the starting age, may also influence how you approach these withdrawals.

    9. Check Your Tax Filing Status

    Your tax filing status can significantly impact your tax liability. If your circumstances have changed—such as getting married or separated—it’s essential to understand how these changes affect your filing options during tax season preparation. Choosing the most appropriate status for your situation can help ensure accurate reporting.

    10. Schedule Time with a Financial Professional

    Tax planning is a year-round effort, and working with a financial professional can help you navigate the complexities of the tax code while aligning your strategy with your financial goals. They can provide personalized guidance on topics like deductions, credits, and tax-advantaged savings.

    By starting early and addressing these areas proactively, you can approach tax season with greater clarity and confidence. Taking small, strategic steps now can make a big difference when it’s time to file.

    Tax Season Preparation: Are You Planning Ahead?

    Tax season preparation doesn’t have to be overwhelming. By organizing your financial documents, evaluating your tax strategy, and staying informed about potential changes, you can create a more efficient and informed approach to managing your taxes. Begin today to work towards a process that is more in line with your overall financial objectives.

    Illuminated Advisors is the original creator of the content shared herein. I have been granted a license in perpetuity to publish this article on my website’s blog and share its contents on social media platforms. I have no right to distribute the articles, or any other content provided to me, or my Firm, by Illuminated Advisors in a printed or otherwise non-digital format. I am not permitted to use the content provided to me or my firm by Illuminated Advisors in videos, audio publications, or in books of any kind.

  • 2025 Reference Guides

    Updated tax rates, contribution limits, deductibles, and premiums for the new year

    Bookmark these important “cheat sheets” that include just about every piece of key financial data one might need throughout the year. Collectively, these updates empower people to make informed financial decisions, safeguard their economic well-being, and ensure a more secure and comfortable future.

    Lane Hipple 2025 Key Financial DataDownload
    2025 SS Reference GuideDownload
    2025 Healthcare Reference GuideDownload

  • Andrew Hipple Earns Enrolled Agent Designation

    We are pleased to announce that Andrew Hipple has recently earned the prestigious designation of Enrolled Agent (EA) – the highest credential the IRS awards. This remarkable achievement is a testament to Andrew’s dedication, expertise, and commitment to providing exceptional financial planning services.

    An Enrolled Agent is a federally-authorized tax practitioner empowered by the U.S. Department of the Treasury. Individuals who hold this designation are recognized for their exceptional expertise in the field of taxation and are granted unlimited rights to represent taxpayers before the Internal Revenue Service (IRS). This means that EAs can handle all types of tax matters and represent any taxpayer in any tax-related issue.

    To earn the Enrolled Agent designation, Andy had to meet stringent requirements, which included passing a comprehensive three-part examination that covers individual and business tax returns, as well as representation, practices, and procedures. This exam, known as the Special Enrollment Examination (SEE), is designed to test the knowledge and skills necessary to handle complex tax situations. In addition to passing the SEE, Andrew was also required to pass a thorough background check conducted by the IRS.

    Learn more about Andrew Hipple

    Andrew’s new designation as an Enrolled Agent underscores his commitment to maintaining the highest standards of professionalism and expertise in the field of taxation. We are confident that his enhanced qualifications will further strengthen our ability to provide top-tier tax planning services to our clients.

  • Lane Hipple Annual Gift Drive Delivers Once Again

    From left: Thomas Lane, III (Partner, Lane Hipple), Melissa Rush (Director of Client Services, Lane Hipple), Maureen Ioannucci (School Counselor, South Valley Elementary), Heather Hackl (Principal, South Valley Elementary), Andy Hipple (Partner, Lane Hipple), and Mike Stringer (COO, Lane Hipple)

    Lane Hipple answers the (jingle) bell

    Once again, the clients and staff of Lane Hipple put forth an overwhelming effort to help bring Christmas to local families who wouldn’t otherwise have the means to celebrate. For the third year in a row, we partnered with South Valley Elementary School, located in Moorestown, NJ.

    Related article: Lane Hipple’s Annual Donation Drive (2023)

    Upon receiving the families’ wish lists from Lane Hipple Director of Client Services, Melissa Rush, our clients took immediate action, delivering gift cards, toys, clothes, jackets, shoes, books, and more. The lists were curated by South Valley Elementary School Counselor, Maureen Ioannucci, who identified and worked together with the families who would benefit most from our annual gift drive.

    “Words can not express the gratitude we have to you and your clients for their outpouring of generosity for our families.  I wish I could take pictures of the families as they come to receive their gifts.  There are tears, hugs and so much gratitude that their children will have a wonderful holiday!!  Once again, thank you from the bottom of our hearts!”

    – Maureen Ioannucci, SVE School Counselor

    The total received from Lane Hipple clients included $4,800 in gift cards, $1,350 in cash donations used to purchase gifts, and all the items shown under the tree below.

    To our clients:

    We are immensely grateful for your incredible generosity! Our campaign to fulfill the holiday dreams of local families has surpassed all expectations. These children had an unforgettable holiday thanks to you! Their parents are overwhelmed with appreciation, making this experience truly feel like a Christmas miracle.

    Wishing you a joyous holiday season and a prosperous new year.

  • Medicare Premiums Going Up by 5.9%

    The Medicare Part B premium will be $185 per month in 2025, a 5.9% increase from this year’s $174.70. Most individuals pay no premium for Part A, as long as they’ve paid into Medicare at least ten years (or are married to someone who did). But for individuals age 65+ who are new to the country (as legal residents) or otherwise don’t qualify for free Part A, they can buy into it for $285 per month if they have at least 30 quarters of coverage, or $518 if fewer than 30 quarters (up from $278 and $505, respectively, in 2024).

    All of the IRMAA amounts went up as well. The IRMAA will start at a MAGI of $106,000 for individuals and $212,000 for couples. MAGI for IRMAA purposes is adjusted gross income plus tax-exempt interest. This is based on the most recent tax return the IRS has on file, generally 2023.

    2025 IRMAA Table

    Medicare participants should have received their premium notices in early December. As always, they can appeal the IRMAA if they have experienced a life-changing event and expect their income to be lower than the amount used to calculate the 2025 IRMAA. If they appealed last year due to retirement or other reasons, they will need to appeal again this year. Then next year the tax return used for the IRMAA should reflect their lower income going forward. If the tax return used to figure the IRMAA is not correct—say they filed an amended return—this is also grounds for appeal.

    The Part B deductible will be $257, up 7% from the 2024 deductible of $240. The Part A deductible will be $1,676, up $44 from $1,632 in 2024. After the Part A deductible is paid—covered by most Medigap policies—Medicare will cover the first 60 days of hospital costs. After 60 days, the coinsurance amounts are $419 per day for days 61–90 and $838 beyond that. These Part A coinsurance amounts are also covered by Medigap. Indeed, these high Part A costs, as well as the 20% coinsurance for Part B, are the reason Medicare supplement insurance (Medigap) is recommended.

    Medicare Advantage is a different animal. These plans are free to establish their own costs and benefits as long as they meet certain minimum Medicare requirements. Many Medicare Advantage plans have no deductible. Some even rebate all or part of the $185 Part B premium. Individuals with Medicare Advantage plans should refer to their evidence of coverage booklet to see what their hospital and other costs would be.

    Take the time to review your situation with a Medicare expert.