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Some issues fly under the radar until they trigger an unexpected tax return notice, penalty, or tax bill. What may seem like routine financial activity can quickly turn into a costly mistake if it’s reported incorrectly.

Below are seven commonly misunderstood tax situations that deserve careful attention before filing.

What Everyone Should Know

The recently passed One Big Beautiful Bill Act (OBBBA) addresses some tax law uncertainty while creating several benefits impacting your 2025 tax return. One of these benefits is a new $6,000 deduction for seniors. Here is what you need to know.

The IRS is penalizing late filers of S corporation and partnership tax returns. This despite the fact that late filing of the tax returns (Forms 1120S and 1065), due March 15th, often does not impact the receipt of the taxes due on April 15th. Those that are getting this penalty are often couples and other small firms who have formed these business entities to provide legal protection for their shareholders.

With the passage of the One Big Beautiful Bill Act (OBBBA) of 2025, there's the ability to receive a deduction for overtime pay from your federal tax obligation. Here's a recap of the rule and several tax tips to ensure you receive the full benefit of the deduction.

Better to Be Surprised Now Than During an Audit

Before you file away your tax return and all its related records, now is the time to make a final review of the material. This can be in either paper or digital form as long as you know where it is, it's securely stored, and you feel it will meet the requirements of substantiation. Here are some tips:

It's one thing to be taxed on retirement contributions and their related earnings when you withdraw funds from your IRA or 401(k) during retirement. It's quite another when you pay the tax PLUS a 10% penalty for an early withdrawal. Need funds prior to retirement and want to avoid the early withdrawal penalty? Here is what you need to know.

If you have problems getting to sleep at night and you turn to the IRS tax code for help, you might find some vocabulary that is very foreign to words you use every day. One of the more common words used by the IRS is the term contemporaneous. So what does it mean and why should you care?

If you’re used to getting your tax refund as a paper check, that era is basically over.

In March 2025, a presidential executive order directed federal agencies to move federal payments and collections away from paper and into electronic systems “to the extent permitted by law.” That includes IRS refunds and, eventually, payments to the IRS as well.

Following that order, the IRS announced that it would begin phasing out paper refund checks for individual taxpayers starting September 30, 2025.

For the 2026 filing season and beyond, taxpayers should assume that refunds will normally be paid electronically, with paper checks reserved for a shrinking set of exceptions.

For years, crypto tax reporting has lived in a strange world where taxpayers were expected to self-report everything while the IRS had limited third-party visibility. That era is ending.

Starting with 2025 transactions, custodial crypto platforms must begin reporting certain digital asset sales and exchanges on a new IRS information return: Form 1099-DA (Digital Asset Proceeds From Broker Transactions).

That means more taxpayers will receive crypto tax forms that look and feel a lot like the brokerage forms we have dealt with for decades.

Convenient? Eventually.

Pain-free? Do not get carried away.

The One Big Beautiful Bill Act (OBBBA) makes tip income tax-free. But as with any new tax law, the fine print matters, and some of these details still need clarification.

Here is what you should know.

With the pending tariffs and turbulent markets, the last thing on most taxpayers minds is tax planning. But in the midst of all this turmoil is the potential for tax saving activity available to those willing to plan accordingly. Here is what you need to know.

While more and more legislation is introduced that penalizes all of us for doing things wrong on our tax returns, please remember that at its origin, tax collection in the U.S. is voluntary. In other words, the tax code is defined, we are given due dates, and the government asks us to voluntarily comply.

When you don’t, there are late filing penalties, underpayment penalties, fines, fees, interest and other imposed compliance incentives including audits. To help guide Congress and the Treasury Department, there are ongoing studies conducted to try to calculate the trends in non-compliance.

Now Is the Time to Make Estimated Tax Payments.

If you have not already done so, now is the time to review your tax situation and make an estimated quarterly tax payment using Form 1040-ES. The 4th quarter due date for the 2025 tax year is due on or before January 15, 2026.

With kids now back in college, the fact of higher educational costs is impossible to ignore.

As you or your child navigates campus, you are now in position to start navigating the possible tax implications of your new-found college expense.

Outlined here are three of the more popular ways to reduce your taxes in 2025 as a result of this educational expense burden.