Key Takeaways
- Start with what you know. Look at last year’s tax situation as your guide—if not much has changed in your life, you can expect similar results. This simple step can ease anxiety and help you feel more prepared as tax season approaches.
- Understanding your tax bracket empowers you. By calculating your taxable income, you can estimate your tax rate and get a clearer picture of what you might owe. Remember, you’re never taxed at the full bracket rate on every dollar—and knowing this can help you feel more confident navigating the process.
It’s that time of year again! Whatever your stance on taxes, they are coming due–and soon. How would it feel to be a little more prepared for what you might owe?
Never tax advise, and never in absolutes when we’re talking about the complicated formulas of the US Federal tax system! However, there is a way to get a little clarity on your upcoming tax bill.
Use what you do know in order to anticipate what to expect. What was your tax situation like last year? If not much has changed and you nearly broke-even (meaning, didn’t have a huge refund or tax bill) you’re likely going to experience something similar. And, good job!
If you did get a huge refund or found yourself with a large bill, however, here are some helpful ways to manage that.
If anything did change last year? If say, in 2025, you: started a new job, sold a house, got married or had a child, your taxes might look a little different this year because each of those life events could alter the amount of taxes due.
How Much Did You Make?
First things first! Find your documents and determine how much you made in 2025.
For the traditionally employed this will look like your W-2 form from your employer. The deadline to get this to you was Jan 31. Keep this form handy for further steps below.
For solopreneurs or even those with a side-hustle, you’re going to want to find written evidence of your annual income from all of the ways you made money. This could be your profit and loss report from your bookkeeping, your 1099 from a contract work employer (also due to you by Jan 31), or a similar form like a 1099-K if you took any digital payments via online merchants like Venmo, Paypal, etc.
Find your numbers and get a rough idea of what you made. The government would love to tax you on this full amount, however, read on for the many opportunities to lower your taxes!
How Much Might You Owe?
If you can get your taxable income down, your tax bill decreases as well. There are a few standard ways to do this.
Making contributions to tax-deductible accounts throughout the year is one way to lower your taxes. For the traditionally employed these would be to a savings plan like a retirement 401(k) or health savings account (HSA).
For solopreneurs perhaps you’re already making estimated quarterly tax payments that will go against your tax bill. Another way to lower your taxable income is counting up your deductible business expenses. Here’s a handy list to get you started.
Additionally, one tool we can all use to lower our taxes is the Standard Deduction. This is an amount set by the IRS to reduce your taxable income in one quick swoop rather than “itemizing” everything you paid tax on all year long. Essentially, to estimate your tax bill, you will take what you made, decide how you will file (single, head of household or married) and subtract your specific Standard Deduction. Read on for an example of how to do this! (For a more in-depth tax calculation, including your dependents and tax credits, use this online calculator!)
Tax Year 2025 Standard Deductions
Single–$15,750
Head of Household–$23,625
Married filing jointly–$31,500
Tax Year 2025 Tax Brackets
| TAX BRACKET | SINGLE | HEAD OF HOUSEHOLD | MARRIED |
| 10% | $0 – $11,925 | $0 – $17,000 | $0 -$23,850 |
| 12% | $11,925 – $48,475 | $17,000 – $64,850 | $23,850 – $96, 950 |
| 22% | $48,475 – $103,350 | $64,850 – $103,350 | $96,950 – $206,700 |
| 24% | $103,350 – $197,300 | $103,350 – $197,300 | $206,700 – $394,600 |
Maths! For example, if you are filing Single and made $75K in 2025, you would qualify for the Standard Deduction and any other things you paid into that will lower your taxable income. But, let’s say you didn’t contribute to anything additionally that would lower it: ($75,000 your annual income – $15,750 your Standard Deduction = $59,250). Finding that amount on the chart under SINGLE shows that you are in the 22% tax bracket. You can estimate that you might owe as much in taxes as 22%, but you can anticipate you will be taxed at an even lower rate because the complications of our tax system include not every dollar being taxed equally. Only a small percentage of your income is actually taxed at that full rate. This is why, especially for solopreneurs it’s always best to pay someone to do your taxes for you if you are in fact responsible for finding your own deductions.
Once you see your max tax rate, you can subtract any taxes you’ve already paid, whether they be collected from your employer (box 2 on your W-2) or pre-paid via estimated quarterlies. If you already paid ahead, that’s awesome!
We can all agree that the Federal Tax system is unnecessary complicated (which it shouldn’t be, btw) in order to keep you in the dark about (money, in general, I would argue) how taxes actually work.
How would it feel to approach the tax-filing process with a little more confidence this year?
FAQ’s
- I’m a solopreneur and responsible for taking care of my own taxes. How do I know if I’m required to be making quarterly tax payments to the IRS?
Typically, the rule here is that if you receive a tax bill of larger than $1K you should be sending in your tax payments quarterly throughout the year. You can find the information on how to do this here.
- What are the penalties if I skip out on my federal taxes?
Failing-to-file and failing-to-pay both incur penalties. With failure-to-file, especially if over 60 days late, minimum penalties can be hundreds of dollars. If you’re going to be late filing, it’s best to file an extension and send in whatever payments you can; showing good faith and working with the IRS on a payment plan can save a substantial amount on penalties.
Still feeling freaked out about taxes? Schedule a free thirty minute session with me! I’ve got your back navigating this!
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