Tax Season Tips: Stay Compliant & Avoid Costly Mistakes

Stitch March 19, 2025 8:00:00 AM CDT

Tax season is overwhelming, but proper preparation can save you time, money, and stress. Whether you’re filing as an individual or managing business tax responsibilities, knowing the rules and key deadlines is essential. From avoiding scams to maximizing deductions, here’s everything you need to keep in mind for a smooth tax season.

Tax Tips for Individuals

Gather All Tax Documents Before Filing

Before starting your tax return, make sure you have all the necessary paperwork on hand. Common documents include:

W-2s (for traditional employees)
1099s (for independent contractors, freelancers, and investment income)
K-1s (for partnership or S-corp earnings)
1095s (for healthcare coverage reporting)

Filing without these documents could lead to errors, delays, or even penalties.

Keep Track of Tax-Deductible Expenses

If you plan to claim deductions, keep records of every qualifying expense. Whether it’s business-related purchases, medical costs, or other deductible items, having receipts and proper documentation is crucial to support your claims.

Take Advantage of All Possible Deductions

Many taxpayers overlook deductions that could significantly reduce their tax liability. One example is real estate taxes, which may be deductible if you own property. Not sure if an expense qualifies? Consult a tax expert to maximize your return without risking an audit.

Use IRS Free File If You Qualify

If your adjusted gross income (AGI) is $84,000 or less in 2024, you may qualify for IRS Free File, a program that provides free tax preparation and electronic filing. Since income limits may change in 2025, always check IRS guidelines to see if you’re eligible.

Tax Tips for Businesses

Properly Categorize Your General Ledger

Keeping accurate and well-organized financial records is essential for businesses. Make sure your general ledger is categorized correctly to simplify the filing process and ensure compliance.

Understand Business Deductions

Businesses can deduct many expenses, but not all are fully deductible. Certain costs, like meals and entertainment, have limits on deductibility. If you’re unsure about which expenses qualify, consult a tax professional to ensure compliance while maximizing savings.

Stay on Top of Tax Payment Deadlines

Different businesses have different tax filing requirements and payment schedules based on size, revenue, and structure. Some must file quarterly, while others follow an annual schedule. Check IRS and state tax deadlines to avoid penalties.

File 1099s on Time

If your business paid non-corporate entities (such as independent contractors) during the year, you need to file 1099 forms by January 31. Missing this deadline can lead to penalties, so make sure they are properly filed and sent to recipients on time.

Be Proactive with W9s

Before tax season rolls around, collect W9 forms from all applicable vendors and contractors. Having this information ready ensures a smooth 1099 filing process and prevents delays.

Beware of Tax Scams

Every year, scammers try to take advantage of taxpayers, often claiming that they owe “back taxes” or face penalties. It’s important to remember that official tax communications will always come directly from the IRS or your state tax department via mail—never through phone calls, emails, or text messages. If you receive a suspicious message, don’t engage—verify its legitimacy by checking directly with the IRS or your state tax office.

Final Thoughts

Tax season doesn’t have to be stressful—being proactive and organized can make a big difference. Avoid scams, keep accurate records, and take advantage of every deduction available to you. If you’re unsure about anything, don’t hesitate to seek professional advice. By planning ahead, both individuals and businesses can ensure compliance and maximize tax savings.

Need help navigating your tax requirements? Contact a tax professional today to ensure a seamless filing experience. PEOs also serve as a great resource during tax season and throughout the year to guaranteeing your taxes are well-managed throughout the year.