April 15 is close. And whether you’re putting the finishing touches on your 2025 return, navigating a tax bill you weren’t expecting, or thinking through how this year’s changes affect your bigger financial picture, this issue covers the ground that matters most right now.
Mega Backdoor Roth Might Not Be Your Biggest Tax Problem
A mega backdoor Roth might not be the best use of available dollars if you already have sizable pre-tax balances in IRAs or retirement accounts. While a mega backdoor Roth can help move new savings into a tax-free bucket, large pre-tax balances may already be creating a future tax problem.
As those balances continue to grow, they can create future RMD pressure, which may increase taxable income, affect Medicare premiums, and reduce tax flexibility later in retirement.
If you already have a large pre-tax retirement balance, the bigger long-term tax issue may not be where to direct your next dollar. It may be the future tax burden attached to money you’ve already saved. A mega backdoor Roth can still be valuable because it helps position new savings for tax-free growth. But if large pre-tax balances are likely to create future RMD pressure, partial Roth conversions may deserve greater priority because they directly reduce that future tax liability.
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The April 15 Deadline: What You Actually Need to Do
Most individual 2025 federal returns are due April 15. If you’re not ready, you can file for an extension and buy yourself until October 15 to submit the paperwork. What the extension doesn’t buy you is more time to pay. If you owe, that amount is still due on April 15. Pay what you can today and avoid letting interest and penalties compound on the difference.
If a refund is coming your way, file as soon as possible and set it up for direct deposit. IRS has been sending letters to filers who left bank account details off their returns, asking for that information within 30 days. Miss that window and your check comes by mail. At that point you could be waiting six weeks or more past the deadline before you see any money.
If You Owe and Can’t Pay
The most important thing is to file your return on time anyway. The penalty for filing late is steeper than the penalty for paying late, so don’t let one problem create two.
From there, IRS gives you options. If your total balance (tax, penalties, and interest combined) is $50,000 or less, you can set up a simple payment plan directly through your IRS online account. For more complicated situations, an offer in compromise may let you settle for less than you owe. IRS will want a full picture of your assets and income, and the central question they’re evaluating is whether you can realistically pay the full balance. The application fee is $205, though low-income filers are exempt.
One important caution: be skeptical of any firm promising to slash your tax debt for a fee. IRS uses the phrase “offer-in-compromise mills” for these operations, and they rarely deliver what they advertise. If you’re facing a difficult tax debt situation, let’s work through it together.
Gifting in 2026: More Room to Give
The annual gift tax exclusion rose to $19,000 per person this year. That means you can give up to $19,000 to as many individuals as you choose without filing a gift tax return, paying any gift tax, or touching your lifetime exemption.
If you are single with three family members you want to benefit, that’s $57,000 in excludable gifts in a single year. And if you want to give more, larger gifts don’t automatically trigger tax. They simply require a Form 709 filing. You won’t owe actual gift tax until you’ve used your full $15 million lifetime exemption.
If legacy planning is part of your broader picture, now is a good time to revisit how your annual gifting strategy fits in.
Retirement Accounts: What’s Changing and What’s Worth Watching
If you’re 70½ or older and making charitable gifts, qualified charitable distributions remain one of the most tax-efficient giving tools available. For 2026, you can transfer up to $111,000 directly from your IRA to a qualifying charity. That amount isn’t included in taxable income, doesn’t raise your adjusted gross income, and counts toward your required minimum distribution for the year.
Currently, QCDs to donor-advised funds are not permitted. A bipartisan bill in Congress would change that, allowing DAF contributions to qualify the same way direct charitable gifts do. It’s worth watching as the legislative calendar develops.
Also worth knowing: the Department of Labor recently pulled back the 2024 regulations that expanded who qualifies as an investment advice fiduciary for retirement accounts. The five-part test under ERISA has been restored, effectively ending a regulatory saga that began in 2016.
The AMT: A Quiet Change With Real Impact
The alternative minimum tax doesn’t generate much conversation, but a change embedded in the One Big Beautiful Bill could affect a meaningful number of higher-income households beginning with 2026 returns.
The OBBB permanently extended the higher AMT exemption amounts from the 2017 Tax Cuts and Jobs Act, which is good news. But it also lowered the income thresholds at which those exemptions begin to phase out. Starting in 2026, the phaseout begins at $1 million for married couples and $500,000 for single filers. The exemption also phases out more quickly once those thresholds are crossed.
In practical terms: more filers will owe more in AMT starting in 2026 compared to 2025, particularly those with significant itemized deductions, incentive stock options, or certain investment income. If any of those apply to your situation, it’s worth running the numbers before the year gets away from us.
IRS Reform: Rare Bipartisan Progress
There’s unusual agreement on Capitol Hill right now around reforming how IRS operates. Senate Finance Committee leaders from both parties have introduced a 63-provision bill aimed at strengthening taxpayer rights and making it easier for individuals and businesses to challenge IRS determinations.
Two provisions worth noting: one would let the Tax Court waive the standard 90-day deadline for filing deficiency case petitions when there are legitimate reasons for the delay. Another would require IRS agents to get written supervisory approval before formally notifying a taxpayer of an assessable penalty.
The bill also proposes regulating unenrolled tax preparers by requiring continuing education and a background check before receiving a preparer ID number. Recent research found significant error rates among this group, particularly on refundable credits and Schedule C items. It’s one more reason credentialed, integrated advice matters.
A Few Practical Notes
Filing for a deceased family member. If you’re handling a return for someone who has passed, the process varies depending on whether you’re a surviving spouse or a personal representative. IRS has a clear, step-by-step interactive guide called “How do I file a deceased person’s tax return?” that walks you through each scenario.
IRS enforcement priorities. IRS is actively scrutinizing a handful of abusive tax schemes, including bogus self-employment tax credit promotions, overstated withholding claims, and improper refundable credit filings through Form 2439. If you’ve seen promotions related to any of these, reach out before taking any action.
529 accounts for home purchases. Two House members have proposed allowing first-time home buyers to use 529 funds tax-free toward a home purchase, with no dollar limit. We don’t expect it to gain serious traction, but it reflects how wide the conversation has gotten around housing affordability.
As always, if any of this raises questions about your specific situation, I want to hear from you. Tax planning isn’t just about what you owe in April. It’s about making sure the decisions you make today still make sense five, ten, and twenty years from now.