A Working Professional’s Guide to Reviewing a Tax Return

As you review your 2025 tax return in 2026, resist the urge to look at just one number. Whether you received a refund or wrote a check, that result is only the headline. The return itself tells a much fuller story.

Your 2025 return captures income decisions, credits claimed, deductions taken, and tax exposure that will influence the year ahead. For working professionals, this is the moment to step back and use the return as a diagnostic tool rather than a filing requirement.

Here is where a thoughtful review makes a difference.

Start With Filing Status and Deductions

Begin at the top of Form 1040 and confirm your filing status reflects your current situation. If you were divorced or widowed during 2025, that designation matters.

If you are married, it may be worth comparing Married Filing Jointly and Married Filing Separately in certain circumstances. This can be relevant when there are liability concerns, large income disparities, significant itemized deductions, or certain income-based student loans. In some cases, filing separately may produce a lower overall tax liability.

Next, review whether you took the standard deduction of $15,750 if single or $31,500 if married filing jointly. If so, consider whether bunching charitable contributions, medical expenses, or property taxes into one year could allow for better itemization in a future return.

If alimony is involved, the agreement date matters. Agreements executed after December 31, 2018, do not allow alimony to be deductible by the payor or taxable to the recipient. Agreements before January 1, 2019, follow the prior rules.

Review Dependents and Education Credits

If you claimed dependents, confirm all applicable credits were addressed.

For children under age 17, the Child Tax Credit may apply if modified adjusted gross income is below or within the phaseout range beginning at $200,000 for single filers or $400,000 for married filing jointly.

If you paid for care for a qualifying individual, such as a dependent child under age 13, so you could work, the Child and Dependent Care Credit may be available.

If you, your spouse, or a dependent was in college during 2025, review whether the Lifetime Learning Credit or the refundable portion of the American Opportunity Tax Credit was claimed. Eligibility begins to phase out above $90,000 of modified adjusted gross income for single filers and $180,000 for married filing jointly.

Watch for AMT and Unexpected Results

If the Alternative Minimum Tax was reported on Form 6251, that deserves attention. Reviewing strategies that reduce AMT exposure, such as minimizing large capital gains or maximizing retirement contributions, may be relevant going forward.

If you paid a significant amount of AMT in 2024, Form 8801 may show whether a credit was available.

Also, review whether you owed more than expected or received a larger refund than anticipated. Consider whether this was driven by a unique circumstance, such as the sale of a highly appreciated investment, by comparing taxable income from the last two years’ tax returns.

If you underwithheld or underpaid estimates and incurred a penalty, that is not just a paperwork issue. It is a signal to adjust withholding or estimated payments for 2026.

Understand Investment Income and Surtaxes

If interest or dividends were reported, reference Schedule B to identify which accounts generated income and whether that income was taxable or tax-exempt. Distinguish between ordinary and qualified dividends.

If earned income exceeded $200,000 for single filers or $250,000 for married filing jointly, the Additional Medicare Tax of 0.9 percent may apply.

If the modified adjusted gross income exceeded those thresholds and there was significant net investment income, the 3.8 percent Net Investment Income Tax may apply. If income is near these levels, reduction strategies may be worth considering for the current year.

If capital gains or losses were reported, review Schedule D. Confirm capital gain distributions and check for short-term and long-term loss carryovers from prior years.

If you exercised stock options or received equity compensation such as ISOs, NQSOs, or RSUs, review your W-2 and Schedule D to understand how those transactions were taxed.

Income and Account-Specific Items

W-2 employees should review their W-2 for HSA and FSA contributions, as well as retirement plan contributions and employer matching.

If you received eligible income from overtime or tips in a qualified occupation, review Schedule 1-A to confirm applicable deductions were claimed. Eligibility begins to phase out at $150,000 of modified adjusted gross income for single filers and $300,000 for married filing jointly.

If you contributed to an HSA in 2025, the maximum contribution was $4,300 for a single plan and $8,550 for a family plan, with a $1,000 catch-up if age 55 or older.

If you took a non-qualified distribution from a 529 account, Form 5329 calculates the penalty.

Rental real estate owners should review Schedule E for the deduction of expenses. Student loan interest may be deductible on Schedule 1. Interest on a qualified new vehicle assembled in the United States with a loan originated after December 31, 2024, may also be deductible, with eligibility phasing out above $100,000 of modified adjusted gross income for single filers and $200,000 for married filing jointly.

Retirement Plan Review

If you made deductible traditional IRA contributions for 2025, the limit was $7,000, or $8,000 if age 50 or older. Roth IRA contributions share the same limits, though they are not reported on Form 1040 unless claiming the Retirement Savings Contribution Credit.

If you reached your Required Beginning Date in 2025 or inherited an IRA, confirm required minimum distributions were satisfied and properly reported.

If you made non-deductible traditional IRA contributions, ensure Form 8606 is tracking cost basis. If you converted from a traditional IRA to a Roth IRA, confirm the conversion was properly reported and that non-deductible amounts were treated as non-taxable.

If retirement funds were rolled over, verify they were treated as rollovers and not taxable distributions.

A Final Thought

Your 2025 tax return is complete. That makes 2026 the right time to learn from it.

A careful review now often leads to small adjustments that make a meaningful difference. Updating withholding, refining contribution levels, managing income thresholds, or correcting reporting issues early can reduce surprises next spring.

The goal is not to relive last year. It is to use what happened in 2025 to make better decisions in the future.

WHWM is here to guide you in identifying your priorities, developing a plan, and making adjustments along the way. By choosing WHWM, you're partnering with our Founder and President, Stephen Bodwell. As a CPA and CFP® professional, Stephen is committed to helping you achieve your financial goals and aspirations. Don't hesitate to take the next step toward realizing your dreams. Schedule your complimentary, no-obligation 30-minute consultation with Stephen. 

Walnut Hill Wealth Management, LLC (“WHWM”) is a registered investment advisor offering advisory services in the State of Texas and in other jurisdictions where exempt. The information provided is as of the date indicated and is subject to change.