Photo by Szabó János on Unsplash
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October generally is considered the scariest month. Halloween, obviously, is the main reason for the sinister reputation. But tax matters, notably the Oct. 15 extended return filing deadline, also add to the fear factor. The following five tax moves can make the month less terrifying, and possibly save you some money.
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We’ve all felt the terror of running out of candy on Oct. 31 while young ghouls and goblins are still roaming your neighborhood’s streets. And every adult celebrant knows the terror that is a bad All Hallows’ Eve costume party!
Taxes also add to the traditional spookiness.
Today is the start of the final quarter of the annual tax year. Fear of the federal tax collector also increases as filing procrastinators face the Oct. 15 extension deadline.
Extension misinformation ups fear factor: That impending tax due date is even scarier when you consider the results of a recent National Association of Tax Professionals (NATP) poll.
Almost half (48 percent) of surveyed NATP members said their clients believe a filing extension gives them additional time to pay their tax bill. Another 23 percent reported that their clients believe penalties and interest do not apply because they filed for an extension.
As I’m sure those tax professionals made clear (again, no doubt) to their clients, both of those taxpayer beliefs are wrong.
Yes, filing Form 4868 before or by Tax Day gives you until Oct. 15 to finish your taxes. But note the form’s full name: Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.
The extra six months apply only to sending your completed Form 1040 to the Internal Revenue Service.
If you didn’t pay any tax you expected to owe when you filed for the automatic extension, and have not yet paid it, you now are facing a bigger bill. Uncle Sam has been calculating late-payment penalty and interest charges on the due amount since April 16.
That’s why the first of five tax moves to make this October is to file your extended 2025 tax year return and, if you owe, send that amount with your Form 1040.
1. File, and pay if you haven’t, your taxes. First, finish that Form 1040 and get it to the IRS by Oct. 15. If you don’t, you are going to be hit with nonfiling penalties, too.
If you owe, pay it. If your tax bill is just too large for you to take care of in one fell swoop, pay what you can afford and make arrangements to pay the rest over time.
Whichever filing and payment path you take, do so as soon as possible. If you push them to the absolute final Oct. 15 deadline, your added nonpayment charges and interest, which has been at 7 percent since July 1 (and 6 percent before that), will keep accumulating.
Remember to also complete your state taxes. Most state tax departments allow their taxpayers who got a federal extension the same amount of extra time to finish their state paperwork.
2. Go online to file — and pay — your taxes. The most expedient way to file (and pay if you owe tax) is electronically.
You can use commercial tax software packages. But if your adjusted gross income (AGI) is $89,000 or less, regardless of your filing status, check out the IRS’ Free File program. This year’s eight participating software companies are available through Oct. 15.
Even if you AGI is more than the Free File program accepts, you still have a no-cost option. You can use the companion Free File Fillable Forms program.
Here, the IRS makes available online its most commonly used tax return forms that you can download to your computer, fill out, and then electronically submit to the IRS for free.
You will, however, have to do more work. Free File Fillable Forms doesn’t have a programmed tax software component like those provided via the main Free File component. You must complete the forms yourself (including the necessary math calculations), and have enough knowledge of the tax laws so that you do so correctly.
Electronic payment also is the way to go for any tax due, either an amount you didn’t pay when you got the extension or a sum that came up when you finally filled out your 1040. E-transactions are faster, meaning they will cut some time off any payment-related penalties and interest. The IRS offers a variety of ways to e-pay any federal tax bill.
When you file online, the programs generally give you the option to pay electronically. Or you can do so via your Individual Online Taxpayer Account.
If you can’t come up with the full tax due amount all at once, you also can go to IRS.gov to explore the agency’s payment plans.
And if you happen to discover when you do file that you are due a refund, yay! Be sure to give the IRS your bank or other financial institution account info so that it can directly deposit the tax cash you are owed.
3. Account for taxes on all types of income. Enough of the year has passed to give you a good idea of your total income and expenditures that might be tax deductible. Examining both areas can help you maximize tax-saving opportunities.
Let’s start with what’s coming in, both via your wage-paying job, as well as from side gigs and investment or other income not subject to payroll withholding. You’ll need to account for the due taxes on these added earnings by making 2026’s final estimated tax payment on Jan. 15, 2027. Knowing what to expect now can help you prepare for that tax deadline.
Estimated taxes also come into play for investors. Regardless of whether you’ve been getting dividend and/or capital gains distributions in cash or reinvesting them, those amounts are taxable income.
And since most funds make their biggest payouts in December, be sure to take that into account in your final estimated tax payment planning. Or you can — wait for it — adjust your withholding to cover both your salary and other income sources’ tax liability.
This payroll withholding tax move also should be considered if, when you finally filed your 2025 return this month, you ended up with a big tax bill or surprisingly large refund.
Another way to counter taxable investment income is to reassess and reallocate your portfolio. During this process, you can utilize tax loss harvesting. Here you sell holdings that didn’t perform so well and use the resulting capital losses to offset your taxable gains.
If you have more losers that winners, your first move probably should be to get a new investment guru, particularly in light of the U.S. stock market’s double-digit gains so far this year.
Joking (sorta) aside, once you’ve zeroed out your gains, use up to $3,000 of the excess losses to reduce your taxable ordinary income. Any more than $3 grand can be carried forward to reduce future tax years’ gains.
4. Establish a bunching strategy. A tax bunching plan can help you maximize tax breaks. Bunching is exactly what the name implies. You accumulate allowable tax claims into one year to take full advantage of their tax-reduction value.
Bunching is most often used by taxpayers who alternate between itemizing and claiming the standard deduction. Basically, these filers pay two years’ worth of eligible deductions in the tax year they will itemize.
Their larger-than-normal bunched Schedule A claims let them get the most out of deductible expenses that otherwise might be wasted. Then, having maxed out the combined tax breaks, they use the standard deduction the next filing season.
One itemizing tactic that’s back in play thanks to the Republican’s One Big Beautiful Bill Act (OBBBA) is doubling up on local property taxes. This works if you paid your 2025 real estate tax bill in January, and then make your 2026 tax payment by Dec. 31.
This SALT tax twofer strategy works again now that the OBBBA raised the state and local taxes (SALT) tax deduction cap from $10,000 to $40,000. That 40 grand base it increases by 1 percent through 2029, meaning the 2026 cap is $40,400.
The same system can be used if you wish to make large tax-deductible donations in an itemizing year. Then the next when you use take the standard deduction, you can claim smaller charitable gifts directly on your Form 1040.
Bunching also works if you are looking to use, not lose, your workplace flexible spending account (FSA) money.
An easy FSA bunching option is stocking up on allowable over-the-counter medications that will get you through the coming cold and flu season. You also can schedule covered doctor and dentist appointments now instead of trying to shoehorn them in at the end of the holiday-rushed year. This could be orthodontia for your son or another pair of prescription glasses for your daughter. Or vice versa. Or for yourself.
As long as the medical expenses meet the IRS and FSA administrator guidelines, spend that account’s money before your boss gets to take it.
5. Find a tax adviser now. A tax professional can help immensely with tax moves 3 and 4. With most tax advisers winding down the 2025 tax year for their current clients, they should have a bit more time post-Oct. 15 to talk with potential new customers.
Take advantage of this welcome, but brief, lull by finding a tax pro now that help you finish out 2026 on a good tax note, and get you started on the path to a successful 2027 filing season.
If you wait until next year to start searching for a tax adviser, you’ll likely be out of luck. Demand for tax pros increases every day that April 15 nears and people realize they need professional tax help.
Treat yourself: If meeting the Oct. 15 extension deadline is top of your tax to-do list, get to it.
Once you’ve filed that 1040, Halloween’s scares will be a piece of cake. Or rather a miniature candy bar or two (or more) from the holiday stash you opened early.
Photo by Kay Bell
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No judging here. I always buy an extra bag of 3 Musketeers minis and store it in my freezer. Love that frozen nougat crunch! And there’s still plenty of time to replenish the trick-or-treat goodies you’ll hand out later this month.
Plus, the deserved sugar rush could help you tackle any of the other October tax moves that apply to your financial and tax situations.
Taking care of those tax tasks this month also could provide you the perfect no-tricks-needed treat: a smaller tax bill.
