The Best Time to Start a Financial Plan is Now
by Tricia Bush, CPA, CFP® Owner, AAA Advisory LLC
Worried You’re Missing Tax Deductions?
You’re Probably Not
I recently ran a poll, asking what people fear most about taxes. The choices were new tax law changes, owing more than expected, missing deductions or credits, or getting an IRS notice.
The clear winner? Missing deductions or credits.
That fear is understandable, especially if you scroll social media. There’s no shortage of posts warning you about deductions “everyone is missing,” usually delivered with just enough urgency to make you second-guess everything.
But here’s the good news: most taxpayers aren’t missing anything major, even if they’re doing their own taxes with software.
Why Taxes Feel Simpler Than They Used To
A big reason for this goes back to the Tax Cuts and Jobs Act (TCJA), which has been in place since 2018. TCJA increased the standard deduction and eliminated or limited many itemized deductions. As a result, most taxpayers stopped itemizing, not because they were doing anything wrong, but because it no longer made sense.
More recently, changes under the One Big Beautiful Bill Act (OBBBA) added back a few targeted benefits. These don’t overhaul the system, but they do matter depending on your age and situation.
Here’s what to watch for when filing your 2025 tax return, broken down by life stage.
In Your 20s-40s: W-2 Employees and Young Families
If most of your income comes from a paycheck, your return is usually pretty straightforward.
Under TCJA, many deductions people still talk about online, like unreimbursed employee expenses or work-from-home write-offs, were eliminated for W-2 employees. That’s still true today. OBBBA didn’t change that.
What does matter in this stage:
Retirement contributions (401(k), 403(b), traditional IRA).
Health Savings Account (HSA) contributions.
Student loan interest.
Child Tax Credit and Dependent Care Credit.
Education credits.
OBBBA 2025 updates you’ll want to keep an eye out for when filing your 2025 tax return:
No Tax on Overtime, up to $12,500 for single filers, and $25,000 for married filing joint.
No Tax on Tips, up to $25,000.
No Tax on Car Loan Interest, up to $10,000.
These new OBBBA changes are subject to income limitations. Be sure to check the instructions when filing.
Most people in this group will take the standard deduction, and that’s usually the right answer.
Translation: If your return feels “too simple,” that’s not a red flag; it’s how the system is designed to work.
In Your 30s–50s: Homeowners and Higher Earners
This is where the TCJA vs. OBBBA differences start to show up more.
Under TCJA, the SALT deduction (state and local taxes) was capped at $10,000, which means that even if your state income taxes and real estate taxes were $30,000, you could only take a deduction of $10,000. This made itemizing less beneficial for many homeowners, especially in higher-tax states like Maryland. OBBBA increased that cap up to $40,000, so some households may now be able to deduct more than they could in recent years.
You might want to take a closer look if you have:
Significant mortgage interest.
Higher state or local taxes (including real estate taxes).
Meaningful charitable contributions.
OBBBA also expanded charitable contribution rules, allowing up to $1,000 single or $2,000 for married, even if you don’t itemize starting in 2026, and increasing limits for those who do. So, if you’ve gotten out of the habit of tracking your charitable contributions, you better start again.
Translation: You’re not missing secret deductions, but itemizing may be back on the table for some households, especially with planning.
Business Owners & Side Hustlers (Any Age)
If you’re self-employed or have a side business, deductions still matter, but the rules didn’t dramatically change between TCJA and OBBBA.
What to focus on:
Ordinary and necessary business expenses.
Retirement contributions (SEP IRA, Solo 401(k).
Health insurance deductions.
Depreciation for equipment.
Business use of your home (when appropriate).
Social media often exaggerates what’s deductible here. The biggest missed opportunity usually isn’t an expense; it’s retirement and tax planning done too late.
Translation: Good structure beats aggressive write-offs every time.
In Your 50s–Early 60s: Pre-Retirement Years
This is a transition phase where tax planning starts to matter more than deductions alone.
TCJA simplified a lot of deductions in prior years, but OBBBA introduced new planning opportunities that become relevant here, especially around income timing, charitable giving, and preparing for required distributions.
What to watch:
Retirement contribution limits.
Charitable giving strategies.
Managing taxable income before Social Security and RMDs begin.
Translation: This is the stage where being proactive can save far more than hunting for deductions at filing time.
Age 65+: Retirees
This is where OBBBA made one of its most meaningful changes.
OBBBA introduced a new senior deduction, available to taxpayers age 65 and older. The key feature? It can be claimed even if you take the standard deduction, something that wasn’t possible under TCJA. The senior deduction can be up to $6,000 for a single taxpayer and up to $12,000 for married filing joint.
Other items to watch:
Required Minimum Distributions (RMDs).
Qualified Charitable Distributions (QCDs), if you’re over 70½
Medical expenses, which may become deductible at higher levels.
Translation: You don’t need to itemize to get tax benefits in retirement, but strategy matters more than ever.
Disclosure: This article is for educational purposes only and is not intended to be investment, tax, or financial advice. Investment decisions should be based on your individual financial situation, goals, and risk tolerance. Consider consulting with a qualified financial professional before making investment decisions.
