By Isabella Bartlett

Tax season can be stressful for taxpayers, which is why it is important for taxpayers to plan and stay proactive throughout the year to help reduce the stress of tax season. Proactive planning will help you minimize your tax liability. Here are a few tax planning tips to help you prepare for tax season:

Stay organized 

It’s important that taxpayers stay organized throughout the year. It’s recommended that you keep all personal and any business tax files separate so when tax season arrives, you understand what you have and what you will need for each return. Keeping a record of any donations and contributions will help you decrease your taxable income. 

Adjust your W-4 withholdings 

It’s important to always pay close attention to the percentage of your income that your employer is withholding, especially if your income or tax situation may have changed. Not withholding enough may cause an unexpected tax bill when it is time to file. Withholding too much may leave you with less take-home pay throughout the year. At the beginning of the year, you should be checking your withholdings to ensure the appropriate amount is being deducted from your paycheck to cover your tax liability. An easy tool to check if you are withholding an appropriate amount is the IRS Tax Withholding Estimator on the IRS’ website. 

Contribute to your retirement 

A good way to decrease your adjusted gross income (AGI) is making contributions to retirement plans or traditional IRA accounts. Certain contributions made to a 401(k) plan, 403(b) plan, or a traditional IRA can be deducted from your AGI, which will then decrease your tax liability. It’s important to determine any changes in your contribution in early December, so you will see the advantages when it is time to file if you have increased your contributions. 

Pay Estimated Tax Payments 

If you have income that does not have tax withholdings, then it’s important to make quarterly estimated tax payments during the year. Ensuring you pay estimated tax payments on time helps avoid a hefty tax bill when it is time to file and helps you avoid penalties for underpayment of estimated tax. If you expect to owe more than $1,000 in federal income taxes, you should consider making estimated tax payments. These payments are based on your previous year’s tax bills, and the payments should be paid equally over the four quarters. 

Tax-loss Harvesting 

If you anticipate your capital gains to be high when it is time to file you may want to consider tax-loss harvesting by realizing capital losses to offset capital gains. This method allows you to sell investments for a loss, replace them with similar investments, and then offset realized investment gains. You are allowed to deduct losses from your capital income based on your filing status and the type of losses, whether short or long-term. Another advantage is that any loss not applied to your current year’s return can be carried forward to next year. 

All in all, individuals should begin planning for their tax filings at the beginning of the season to ensure they are prepared. This may involve reviewing and adjusting withholdings, making estimated tax payments, contributing to retirement accounts, and maintaining organized records.

This information has been prepared for informational purposes only, and is not intended to provide, and should not be relied upon for tax, legal, or accounting advice. If you have any questions on how to prepare for the tax season, please do not hesitate to contact us at Lear & Pannepacker.

By Patrick Courtney

New Jersey is making big changes to its taxes in 2025, and they could affect just about everyone. The state’s new $58.8 billion budget includes higher fees on high-end real estate sales, tobacco, and sports betting. The budget increase is the largest in New Jersey history. At the same time, there’s some good news for homeowners and seniors, with expanded tax relief programs on the way.

Tax Hikes

Real-Estate Transfer Fees:

Also known as “Mansion Fees,” there has been an increase in tax when it comes to property transfer. There is a 2% property transfer tax on home sales between $2 million and $2.5 million, an additional 0.5% for every $500,000 in home value over $2.5 million, and a 3.5% cap for homes worth $3.5 million or more.

Tobacco and Vape Products:

The state of New Jersey has increased taxes on tobacco and vape products. For a pack of cigarettes, the tax has increased $0.30 from $2.70 to $3. They have increased the tax for vapes from 10 cents per ml to 30 cents per ml. 

Gambling and Sports Betting:

Originally, tax rates on online gambling were 15%, and tax rates on sports wagers were 13%. With the new budget, the tax rates for both gambling and sports wagers will jump up to 19.75%.

Tax Relief

The new budget has an emphasis on rewarding New Jersey homeowners, specifically to senior homeowners. The state property-tax relief programs will continue, as well as a new program called Stay NJ.

ANCHOR: The Affordable New Jersey Communities for Homeowners and Renters is a property tax relief program allowing NJ homeowners to receive property tax relief. Homeowners with income of $150,000 or less will receive $1,500, and income between $150,000 and $250,000 will receive $1,000. This program also applies to renters who will receive $450 if their income does not exceed $150,000. Eligible seniors aged 65 or older will receive an additional $250 on top of the above amounts 

Senior Freeze: The Senior Freeze Program reimburses eligible senior citizens and disabled persons for their property taxes (or mobile home park site fee) increases on their principal residence (main home). 

Stay NJ: The Stay NJ Program offers substantial property tax relief for qualifying senior homeowners. Eligible individuals will receive a tax credit equal to 50% of their property taxes, up to a maximum of $13,000, with a 2024 benefit cap of $6,500. To qualify, individuals must have owned and lived in their home for all 12 months of 2024 and have an income <$500,000. 

Eligibility for all three of these property tax relief programs can be found in a single application. Your eligibility is based on residency, income, and age as of 2023 and 2024. You can apply for these property tax benefits through the combined application on https://propertytaxreliefapp.nj.gov/. The deadline to file is October 31, 2025.

This information has been prepared for informational purposes only, and is not intended to provide, and should not be relied upon for tax, legal, or accounting advice. If you have any questions regarding the 2025 NJ tax changes, please do not hesitate to contact us at Lear & Pannepacker.