By Bobby Reamer, MBA, CEPA®, CFP® | Founding Partner, Keel Financial Partners
The return is filed. Most people close the folder, feel relieved, and move on until next year. Before you do, it can be useful to take one more look. The weeks right after Tax Day are often a practical time to review what happened, identify any surprises, and decide whether modest adjustments for the current year may be appropriate—especially if your income, deductions, or filing situation changed.
This year’s filing may also provide a helpful baseline in light of recent tax law changes. The One Big Beautiful Bill Act, signed into law in July 2025, made certain provisions of the 2017 Tax Cuts and Jobs Act permanent and introduced additional changes that took effect January 1, 2026. How (and whether) those changes affect you depends on your specific facts and circumstances, but a post-filing review can help you spot items to discuss with your CPA and financial advisor while the details are still fresh.
What Does Your Effective Tax Rate Actually Tell You?
Your effective tax rate is the percentage of your total income you paid in federal taxes. It is on your return, and it is more useful than most people realize.
If it came in lower than expected, it may indicate deductions, credits, timing decisions, or other factors reduced your tax liability. If it came in higher, that can be worth understanding as well. For example, a bonus, a business distribution, capital gains, or changes in deductions can shift your overall result. The goal is not to “chase” a lower rate in isolation, but to understand what drove the outcome and whether any adjustments for this year are worth considering.
We view tax planning as one part of broader financial planning—balancing taxes, cash flow, investment strategy, and long-term goals. Looking at your effective tax rate alongside your full financial picture can highlight questions to explore (and sometimes opportunities), but it can also surface tradeoffs or constraints that matter just as much. A review now can help you prioritize what is most relevant for your situation.
Do Your Withholding or Estimated Payments Need Adjusting?
A large refund can feel good, but it often means you paid more throughout the year than you needed to. On the other hand, owing a large balance can be disruptive to cash flow and, in some cases, may trigger underpayment penalties and interest. There is no single “perfect” outcome for everyone—some people prefer a refund as a form of forced savings—so the aim is to align withholding and estimates with your preferences and projected tax situation while avoiding unpleasant surprises.
If your result was significantly off in either direction, now is the right time to recalibrate. W-2 employees can update their W-4 withholding. If you have self-employment income, business distributions, or meaningful investment income, your quarterly estimated payments may need to be adjusted.
This is worth doing carefully in 2026, particularly if your income varies or you have multiple income sources. The updated Form W-4 includes instructions that may be relevant for certain taxpayers, including items related to qualified tips and overtime income. If any of those apply to your household, it may be worth reviewing withholding early in the year with a qualified tax professional so you can balance take-home pay, potential penalties, and year-end outcomes.
Were Your Retirement Contributions Maximized?
Retirement contributions are a common area to review after filing because they can affect both long-term planning and current-year taxes. That said, maximizing contributions is not always the right choice for every household—cash reserves, near-term goals, and business needs can matter just as much.
If you did not max out your 401(k), IRA, SEP-IRA, or other retirement accounts last year, it is worth understanding why. For 2026, contribution limits have been updated for inflation. If you have room to increase your contributions for this year, now is the time to set that up before the year gets away from you.
If cash flow was the barrier, that is a conversation worth having. If it was simply a matter of timing, automating contributions can make follow-through easier. And if your income was unexpectedly high (or low) last year, it may be worth discussing whether strategies such as a Roth conversion or a backdoor Roth contribution are appropriate. These strategies can create meaningful tax impacts in the year they are implemented and are not suitable for everyone, so it is generally best to evaluate them with a full view of your tax bracket, deductions, and longer-term goals.
What Should You Know About the New Tax Landscape?
The 2025 filing season is the first where many of the One Big Beautiful Bill Act changes are visible in your return. A few that are particularly relevant for our clients:
The SALT deduction cap has increased from $10,000 to $40,400 for 2026. This may be a meaningful change for taxpayers in higher-tax states, although the benefit depends on your filing status, whether you itemize, and your overall tax situation. If you were previously limited by the cap, it may be worth revisiting how state and local taxes fit into your overall planning.
The standard deduction has expanded to $32,200 for married couples filing jointly and $16,100 for single filers for tax year 2026. If you have been taking the standard deduction, it is worth confirming whether itemizing now makes more sense given the higher threshold.
The estate and gift tax exemption is set at $15 million per person for 2026. If your estate planning was built around a lower exemption or concerns about prior-law sunset provisions, this may be a good time to review your documents and strategy. Estate planning decisions can involve legal, tax, and family considerations beyond the exemption amount, so coordination with your estate planning attorney and tax advisor is typically important.
These are meaningful details, but they are not one-size-fits-all. Your 2025 return can be a useful starting point for identifying what may be relevant for your household and what questions to bring into a planning conversation for 2026.
What Are the Most Common Tax Planning Mistakes Worth Avoiding?
Waiting until December. By the time many people think about year-end tax planning, the window for certain strategies may be narrower. Items like Roth conversions, tax-loss harvesting, charitable gifting strategies, and retirement contribution decisions often benefit from having time to evaluate alternatives, coordinate paperwork, and model potential outcomes. However, not every strategy is appropriate in every market or tax environment, and timing decisions should be made in context.
The other common mistake is treating each year’s return as a standalone event. Your tax situation this year affects next year. Decisions about when to take income, how to structure a distribution, or whether to sell an appreciated asset all have multi-year implications that are easy to miss without a complete view of the picture.
We take a team-oriented approach to planning for exactly this reason. Understanding the full picture, the consequences of decisions before they are made, and building a path that holds up over time is how we work.
What Should You Do Right Now?
A few concrete steps worth taking in the next few weeks:
Pull your 2025 return and note your effective tax rate, income by category, and whether the result surprised you. If anything stands out, consider flagging it to review with your CPA and/or financial advisor.
If last year’s refund or balance due was larger than you expected, consider revisiting withholding or estimated payments. The updated W-4 may be worth reviewing depending on your income sources and deductions, and a tax professional can help you evaluate potential penalty exposure and cash-flow tradeoffs.
Confirm your retirement contributions are set up and on track for 2026. If increasing contributions fits your cash flow and goals, setting it up earlier in the year can make it easier to stay consistent.
If changes such as the higher SALT cap, the expanded standard deduction, or the updated estate exemption may affect your situation, consider incorporating them into your planning discussions earlier rather than waiting until year-end—particularly if coordination with your CPA or attorney is needed.
Consider a mid-year planning check-in. For many households, reviewing projections in the spring or summer can provide more flexibility than waiting until late in the year, although the right timing depends on your income pattern and planning complexity.
The Bigger Picture
Filing your taxes is a requirement. Reviewing what they tell you is optional—but it can be a useful way to understand what changed, what stayed the same, and what might matter for the year ahead. With recent updates to the tax code, a post-filing review may be more informative than usual for some taxpayers.
If you would like to walk through your 2025 return with us and talk through what it means for your plan this year, we would be glad to have that conversation.
Frequently Asked Questions
Q: What is an effective tax rate and where do I find it on my return? A: An effective tax rate is commonly described as your total federal tax divided by a measure of your income, expressed as a percentage. There are different ways to calculate it (for example, using taxable income versus adjusted gross income), so it can be helpful to be consistent year to year. One simple approach using Form 1040 is to divide Line 24 (total tax) by Line 15 (taxable income). A tax professional can help you interpret what that number means in the context of your broader situation.
Q: How does the One Big Beautiful Bill Act affect my 2026 tax planning? A: The OBBBA made certain TCJA provisions permanent and introduced changes effective January 1, 2026. Depending on your situation, items that may be relevant include a higher SALT deduction cap, an expanded standard deduction, an updated estate and gift tax exemption amount, and deductions related to qualified tips and overtime income. The impact can vary significantly by filing status, itemization, income sources, and state tax profile, so your 2025 return is best used as a starting point for a more individualized projection.
Q: Do my withholding or estimated payments need to change for 2026? A: Possibly. If you had a large refund or owed significantly more than expected on your 2025 return, your withholding or estimated payments are likely off. The updated Form W-4 now reflects new deductions under the OBBBA. Your financial advisor or CPA can help you recalibrate based on your projected 2026 income and deductions.
Q: What is a Roth conversion and when does it make sense? A: A Roth conversion moves money from a traditional IRA or 401(k) into a Roth account. You pay taxes on the converted amount now, but future growth and qualified withdrawals are tax-free. Whether it makes sense depends on your current tax rate, expected future rates, time horizon, and overall financial picture. It is worth discussing early in the year when there is time to model the impact properly.
Q: When is the best time to do tax planning? A: Throughout the year, with a focused review in spring and again in fall. The most valuable tax planning strategies require time to implement well. By December, many options have already narrowed. Starting the conversation now, while your 2025 return is fresh, is one of the simplest ways to stay ahead of it.
Disclosures
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Financial planning is a tool intended to review your current financial situation, investment objectives and goals, and discuss planning concepts that may be relevant; there is no guarantee that any planning strategy will be successful or that financial planning will help you reach your goals.
This information is not intended to be a substitute for individualized tax or legal advice. Tax laws are complex and subject to change. We suggest that you discuss your specific tax situation with a qualified tax advisor and, where applicable, your attorney.
This material was prepared using Artificial Intelligence (AI) tools.
