What are some of the best tax planning strategies for 2025?

Thanks for these suggestions! With the home office deduction, is it better to use the simplified method or the regular one? I've heard the regular method is more likely to trigger audits but gives a bigger deduction. Also, for SEP IRA vs Solo 401(k), is one generally better for someone in my income bracket?

The simplified home office deduction ($5 per square foot, up to 300 square feet) is definitely easier and less audit-prone, but you're right that the regular method might yield a bigger deduction if you have a large dedicated space or high housing costs. Run the numbers both ways before deciding. For retirement accounts, the Solo 401(k) typically allows higher contribution limits than a SEP IRA at your income level. Solo 401(k) also allows for Roth contributions and catch-up contributions if you're over 50, plus you can take loans from it if needed. SEP IRAs are simpler to set up though, so there's that trade-off to consider.

Does it actually work with all the documentation or do you still need to organize everything first? I've got receipts everywhere - some digital, some paper, some just credit card statements. Would it help with that mess?

I'm skeptical. How is this different from TurboTax or HR Block? Those also claim to maximize deductions but I always feel like I'm missing something. Does this actually do anything those don't?

It handles the documentation mess surprisingly well. You can upload everything - digital receipts, photos of paper receipts, bank statements, everything - and it sorts through them. I literally dumped hundreds of unsorted docs and it organized them by category and flagged potential deductions. Saved me hours of sorting. This is definitely different from TurboTax or HR Block. Those systems only work with information you already know to input. This actually analyzes your documents to find deductions you didn't know about and identifies tax planning opportunities specific to your situation. It's more like having a tax advisor review your finances than just a filing tool.

Wait, how does this actually work? Does it just automate the hold process or something? And are you talking to real IRS agents or some third-party service?

Yeah right. There's no way to "skip the line" with the IRS. They're notoriously understaffed and everyone has to wait. This sounds like a scam that just takes your money and puts you on hold anyway.

It doesn't let you skip the line - it waits in line for you. Their system basically calls the IRS and navigates the phone tree, then stays on hold until a real IRS agent picks up. When that happens, you get a call connecting you directly to that IRS agent. So yes, you're talking to actual IRS employees, not third-party representatives. The service doesn't give you special access or let you jump ahead of others waiting. It just handles the mind-numbing hold time so you don't have to keep your phone tied up for hours or days. I was skeptical at first too, but when I got the call connecting me to an agent after their system had been on hold for about 3 hours, I became a believer.

Is tax-loss harvesting worth it for smaller portfolios? Like if I only have around $30k in investments? The articles I read make it sound like it's only beneficial for people with huge investment accounts.

Tax-loss harvesting can absolutely be worth it for smaller portfolios too. The key isn't the total portfolio size but rather whether you have investments with losses that can offset gains or income. Even with a $30k portfolio, if you have some investments that are down $3,000, harvesting those losses could save you up to $720 in taxes if you're in the 24% tax bracket. The real value comes from being strategic about it - looking for losses throughout the year, not just December, and making sure you're maintaining your desired asset allocation while avoiding wash sales. Just keep good records of your original purchase prices so you can calculate your losses accurately.

Yes! We did this last year and it worked great. Donated to our usual charities plus prepaid some planned donations for this year. Itemized last year and will take standard deduction this year. Saved about $2,300 in taxes by concentrating deductions in one year instead of spreading them out.

That's a good point! Do you know if I can open an HSA myself as a contractor? My health insurance is a high-deductible plan but it's not through an employer since I'm self-employed.

Absolutely you can! That's actually one of the great things about HSAs - you don't need an employer to open one. As a self-employed person with a qualifying high-deductible health plan (HDHP), you can open an HSA through many banks, investment companies like Fidelity or Vanguard, or specialized HSA providers. Just make sure your health plan qualifies as an HDHP under IRS guidelines. For 2025, that means a minimum deductible of $1,600 for individual coverage or $3,200 for family coverage. The maximum 2025 contribution is $4,150 for individual coverage or $8,300 for family coverage, with an extra $1,000 catch-up contribution if you're 55 or older.