As Someone Who Is Working, What Issues Should I Consider When Reviewing My 2025 Tax Return?
As Someone Who Is Working, What Issues Should I Consider When Reviewing My 2025 Tax Return?
Your annual tax return is more than a compliance exercise—it’s a diagnostic tool. Reviewing it carefully can reveal missed deductions, incorrect withholdings, and planning opportunities for the coming year. This checklist is designed for W-2 employees, self-employed individuals, and anyone with earned income reviewing their 2025 federal return.
Family and Filing Issues
- Standard vs. itemized deduction — Did you take $15,750 (single) / $31,500 (MFJ)? Consider bunching charitable gifts or medical expenses in alternating years to enable itemization.
- MFJ vs. MFS comparison — If you have income-based student loans, a large disparity in incomes, or significant itemized deductions, compare the two filing statuses.
- Dependents and Child Tax Credit — If you have children under 17 and MAGI is below $200,000 (single) / $400,000 (MFJ), you may claim the $2,200 Child Tax Credit ($1,700 refundable).
- Child and Dependent Care Credit — Did you pay for qualifying childcare to enable work? Review Schedule 3, Line 2.
- Education credits — American Opportunity Tax Credit and Lifetime Learning Credit available if MAGI is below $90,000 (single) / $180,000 (MFJ). Check Form 8863.
- AMT review — Review Form 6251. Strategies to reduce AMT include maxing retirement contributions or lowering income. Check Form 8801 for prior-year AMT credits.
- Alimony treatment — Varies depending on whether divorce agreement was finalized before or after January 1, 2019.
- Unexpected refund or balance due — Adjust withholdings if a one-time event won’t recur.
Investment Income Issues
- Interest and dividends — Review Schedule B. Determine whether dividends are ordinary or qualified (different tax rates apply).
- Additional Medicare Tax — Earned income above $200,000 (single) / $250,000 (MFJ) may trigger an additional 0.9% Medicare Tax (Form 8959).
- Net Investment Income Tax — MAGI above $200,000/$250,000 with significant investment income may trigger 3.8% NIIT (Form 8960).
- Capital gains and losses — Review Schedule D for loss carryovers and capital gain distributions.
Income-Related Issues
- W-2 review — Review all boxes for HSA/FSA contributions, retirement plan contributions, and employer matching.
- Equity compensation — ISOs, NQSOs, and RSUs may require W-2 and Schedule D adjustments. Collect Forms 3921/3922.
- Overtime and tips deduction — If you received eligible overtime or tip income in a qualifying occupation, verify the deduction was claimed on Schedule 1-A, Lines 13 and 21. Phases out at $150,000 MAGI (single) / $300,000 MAGI (MFJ).
- Self-employment income — Gather 1099-NEC, 1099-MISC, 1099-K forms and document all deductible business expenses.
Retirement Plan Issues
- Traditional IRA contributions — Deductible up to $7,000 ($8,000 if age 50+), subject to income limits if covered by a workplace plan.
- Roth IRA contributions — Not reported on Form 1040 (unless claiming the Savers Credit). Contribution limit is $7,000/$8,000.
- RMDs and inherited IRAs — If you’ve reached your Required Beginning Date or have an inherited IRA, verify RMDs were taken and reported.
- Early distributions — Non-qualifying IRA withdrawals trigger a 10% penalty (Form 5329 / Schedule 2, Line 8).
- Roth conversions — Check Form 8606 for proper reporting and non-taxable treatment of after-tax basis.
Other Issues
- HSA contributions — 2025 limits: $4,300 (individual) / $8,550 (family), plus $1,000 catch-up if age 55+. Review Form 8889.
- 529 non-qualified distributions — Penalty applies. File Form 5329.
- State-specific issues — Review applicable state tax rules and deductions.
- Rental property — Review Schedule E for deductible expenses and depreciation.
- Student loan interest — Up to $2,500 deductible if eligible. Check Schedule 1, Line 21.
- Vehicle loan interest — Up to $10,000 deductible for loans on qualifying U.S.-assembled vehicles originated after December 31, 2024. See Schedule 1-A, Line 30.
Download the Full Working Professional Tax Return Review Checklist
Get the complete checklist with all income, deduction, credit, and retirement plan items. Use it to verify your return was prepared correctly and to identify 2026 planning opportunities with your advisor.