Education Center

When filing taxes, individuals take either the standard deduction or itemized deduction. All taxpayers are eligible to use the standard deduction when filing their taxes. Whereas only certain taxpayers are eligible to itemize their deductions. The standard deduction for 2025 is $31,500 for taxpayers filing jointly with their spouse and $15,750 for single filers.

The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4th, 2025. This extends the provisions of the 2017 Tax Cuts and Jobs Act (TCJA), which were set to expire at the end of 2025. This law has implemented some permanent, significant tax changes, including the extension of the TCJA's tax brackets, an increased standard deduction, and higher gift and estate tax exemption thresholds.

If you experience irregular income year over year, regardless of the source of these funds, it can be difficult knowing how to plan for these surprises. In my previous blog posts, I have advised on how to plan for this type of tax liability and avoid underpayment penalties when income changes during the year.

This article explains how IRS underpayment penalties work, who is most at risk, and practical ways to avoid them. It walks through the IRS safe harbor rules, shows how penalties can be calculated across quarterly payments, and highlights strategies like Form 2210, Schedule AI, and adjusting withholdings. It’s a helpful read for taxpayers with irregular income, retirees, and anyone looking to stay ahead of avoidable tax surprises.