One Expert Explains How To Avoid Tax Surprises During This Filing Season

KEY TAKEAWAYS

• Taxpayers can use free tax software programs to estimate how much their tax bill for 2025 will be and can try to offset how much they owe by taking advantage of some tax breaks before the year ends.
• Typically, taxpayers surprised by a high tax bill get it from not withholding enough from their paychecks throughout the year.

If you did not withhold enough federal income taxes from your paychecks throughout the year, come April 2026, you may have a significant tax bill.

Rob Burnette, CEO and tax and financial planner at Outlook Financial Centre, discusses estimating your 2025 tax bill and preparing for it.

Why This Matters

More than half of American taxpayers lack basic tax literacy, according to a report from the Tax Foundation.1 Taxpayers who are unaware of how much their taxes will be and how much to withhold throughout the year might get slammed with a high tax bill they can’t afford—and if they can’t pay the taxes they owe, the balance can be subject to interest and penalty fees.

However, I would say, if they’re just now looking at that, they’re about eight months late. Tax planning should be something you’re doing all along. For our clients, one of the things we recommend is…to get their withholdings right.

The idea behind it is to have enough withheld from each pay period so that when you get to the end, you’re at a nominal—you don’t owe any taxes. You may owe a little more, a little less, or whatever the case might be, but you’re not going to be staring in the face of a $7,000 or several thousand dollars of tax due.

BURNETTE: If you know you’ve got a bonus coming due, and you know that bonus this year is going to kick you up into the next marginal tax bracket, maybe you talk to your employer and say, “Can you pay me that in January and move that tax into the next year?” So you can do some things like that, things that you have some control over. 

If you’re contributing to a traditional IRA and it’s a tax-deductible one…you have essentially until April 15, or until you file your taxes, to [fully meet your retirement accounts’ contribution limits], and then that will give you a tax advantage.

The other thing I would tell people who own businesses, who are self-employed, is that if you think you’re going to have a big check to write to the IRS, see if there’s equipment you can purchase now to offset that. So, for example, I have a guy who’s in the transportation and shipping business. He was complaining that he had to write a $50,000 check to the IRS. I said, “Well, why don’t you just buy another van? I know you need one.”

Tax Season 2026: A Proactive Guide to Avoiding Unpleasant Surprises

For many, “tax season” is synonymous with stress—a frantic scramble in the final weeks before the deadline to dig up receipts, track down forgotten forms, and pray that the final number isn’t a nasty surprise. But here is the professional secret: taxes shouldn’t be a surprise. If you are blindsided by a large tax bill or a delayed refund, it is usually a symptom of a process that stopped at “filing” and ignored “planning.”

As we navigate the 2026 tax landscape, the complexity of our financial lives—gig work, digital assets, changing life circumstances—demands a more thoughtful approach. Whether you are an employee, a freelancer, or an investor, the difference between a smooth tax season and a chaotic one comes down to engagement, timing, and preparation.

The Fundamental Shift: Filing vs. Planning

The most common trap taxpayers fall into is viewing taxes as a once-a-year event. This “reactive” mindset treats the tax return as an exam you take in April, rather than a financial strategy you build throughout the year.

Filing is the act of reporting what you did last year. Planning is the act of deciding what to do this year to optimise your outcome.

When you only engage with your taxes at the point of filing, you are essentially looking in the rearview mirror. You cannot change the structure of your income, the timing of your investments, or your eligibility for credits once the calendar year has closed. To avoid surprises, you must shift your focus from reporting to anticipating.

Phase 1: The Art of Getting Organised

Before you even log into your tax software or meet with an accountant, your success is determined by your organisation. A disorganised pile of papers is the primary breeding ground for “filing-season panic.”

• Centralise Your Digital Footprint: In 2026, many of your documents arrive digitally. Create a single, encrypted folder for your tax documents. If you receive a 1099 or a W-2, move it to this folder immediately.
• The “Life Event” Audit: Have you married, divorced, bought a home, or had a child this year? These events drastically change your tax reality. Don’t wait until you sit down to file to realise your withholding assumptions from last year no longer apply.
• Review Previous Returns: Your return from last year is the best map for this year. Look at the forms you filed previously; they will remind you of the interest statements, mortgage documents, or investment disclosures you need to gather.

Phase 2: Common Pitfalls to Avoid

Even with the best intentions, small errors can create significant headaches. The IRS and local tax authorities process millions of returns, and their systems are sensitive to discrepancies.

1. The “Mismatch” Error

The most common trigger for tax notices is a mismatch between what you report and what the tax authority has on file. Thanks to systems like the Annual Information Statement (AIS) and various reporting forms, the government already knows a significant portion of your income. Ensure your records align with the data reported by your banks and employers.

2. Ignoring “Invisible” Income

With the rise of the gig economy and digital assets, income streams are more fragmented than ever. Side hustles, small interest payments from high-yield savings accounts, and crypto transactions are all taxable. Forgetting to report these—even if they seem negligible—can trigger automated audit flags.

3. Choosing the Wrong Filing Status

Are you sure you aren’t eligible for “Head of Household” instead of “Single”? A simple status error can cost you thousands in potential tax savings. If your marital status changed, ensure you are utilizing the correct filing status, as this dictates your tax brackets and deduction limits.

Phase 3: Year-Round Strategies for Tax Efficiency

If you want to end the cycle of “tax season surprises,” adopt these three strategies for the rest of 2026 and beyond.

Maximise Tax-Advantaged Accounts

Retirement accounts like 401(k)s or IRAs, and health-specific accounts like HSAs (Health Savings Accounts), are your best friends. Contributions to these accounts often reduce your current taxable income. By automating these contributions, you lower your tax liability automatically, without having to “remember” to do it at the last minute.

Review Withholding Regularly

Many people treat a large tax refund as a “savings account.” It is not; it is an interest-free loan you are giving to the government. Conversely, owing a massive tax bill in April means you haven’t paid enough throughout the year. Use the tax withholding estimators provided by the IRS or local tax agencies to ensure your paycheck deductions align with your actual expected tax liability.

Tax-Loss Harvesting

If you hold investments in a taxable account, don’t wait until the market crashes to look at your portfolio. Regularly review your investments. Selling a losing asset to offset the capital gains from a winning asset (tax-loss harvesting) is a legal and powerful way to reduce your tax bill.

Why “Doing It Yourself” Isn’t Always the Cheapest Route

There is a common misconception that hiring a professional is an “expense” that should be avoided. However, if your financial life involves rental property, self-employment income, or complex investment portfolios, the cost of a tax professional is often dwarfed by the value of the deductions they identify or the errors they prevent.

If you are a W-2 employee with a straightforward situation, modern software is excellent. But if you find yourself feeling anxious, confused by new tax law changes, or unsure about your eligibility for credits, don’t guess. The price of a mistake—penalties, interest, and the time required to amend a return—is far higher than the fee for a tax consultation.

The 2026 Checklist: Your Immediate Actions

As you head into the final stretches of this filing season, here is your immediate action plan:

1. Gather: Aggregate all 2025 forms (W-2, 1099, interest statements).
2. Verify: Check your AIS/TIS or equivalent tax statements against your internal records.
3. Calibrate: If you found yourself owing a large amount, update your W-4 or estimated tax payments today for the current year.
4. Confirm: E-file your return. The error rate for paper returns is significantly higher, and the processing time is exponentially longer.
5. Secure: Protect your data. Use multi-factor authentication for any tax or financial portal. Identity theft is a real risk during filing season.

Final Thoughts

Taxes are the price we pay for a functioning society, but that doesn’t mean you have to pay more than your fair share through administrative errors or poor planning. By treating your taxes as a continuous financial process rather than a sudden spring emergency, you turn a period of anxiety into an opportunity for better financial health.

When you prioritize organization and proactive planning, you don’t just avoid surprises—you gain the clarity needed to make smarter financial decisions all year long.