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Tax Surprises and Solutions

• Jun 17, 2025 wisecpa

Watch Out for These Common Tax Surprises That Could Hit Your Bottom Line

At Wise Accounting, we help business owners and individuals throughout Delaware stay ahead of tax changes, deductions, and those all-too-common surprises that can catch you off guard. While the tax code offers plenty of opportunities to reduce your tax bill, it’s also filled with traps that can result in unexpected costs. Here are some of the most common tax surprises to look out for—especially if you’re a homeowner, parent, or investor.

1. The Home Office Tax Surprise

Working from home can lead to valuable tax deductions—but it can also cause complications when it comes time to sell your home.

If you’ve claimed a home office deduction, you may owe taxes on part of the gain when you sell your home. For example, if your detached office makes up 5% of your total property square footage, 5% of the profit from the sale could be taxable—even if you qualify for the standard home sale exclusion.

Pro tip: If your office is in a separate structure, moving it into your main home the year you sell could help you avoid this issue. Also, keep in mind that any depreciation claimed on your home office—regardless of its location—must be recaptured and taxed when you sell.

2. Your Kids Are Growing—And So Are Your Taxes

Many parents are surprised when their tax refund shrinks as their children grow older. That’s because key credits phase out as kids age.

Take the Child Tax Credit: You can receive up to $2,000 per qualifying child under age 17. But the year your child turns 17, you’ll lose that credit entirely—resulting in a smaller refund or a bigger bill when you file.

This change doesn’t happen gradually—it hits all at once. Families who aren’t prepared can feel the sting during filing season.

3. Losses Aren’t Always Fully Deductible

Capital losses—like those from selling stocks, crypto, or other investments—can be used to offset capital gains. However, if your losses exceed your gains, you’re only allowed to deduct $3,000 of the excess on your tax return each year.

Any remaining loss carries forward, but that doesn’t help much if you’re expecting a big deduction to offset this year’s income.

For example, if you lost $5,000 in the market and didn’t sell anything at a gain to balance it out, you’ll only be able to deduct $3,000 in 2025. The rest will roll forward to future years, delaying your tax benefit.

4. Using Last Year’s Return to Plan for This Year? Be Careful.

Many business owners and individuals use their prior year’s tax return as a guide when planning for the current year—but that strategy can backfire.

Changes in income, deductions, or tax law could mean your 2024 strategy won’t apply to your 2025 situation. That’s why working with a team like Wise Accounting, which specializes in small business accounting in Delaware, is so important. We stay current with tax code changes and offer personalized planning to help you avoid surprises.

Get Proactive With Your Tax Strategy

Avoiding tax surprises starts with planning ahead. Schedule a session with Wise Accounting to assess your current situation, review any potential pitfalls, and create a proactive strategy for your 2025 taxes.

Want even more insight into preparing for next tax season? Check out our related post:
👉 Tax Preparedness 2025: What Small Business Owners Need to Know

Need support navigating tax season or managing your books? Trust the small business accounting Delaware professionals at Wise Accounting. We’re here to help you make informed decisions, stay compliant, and grow your business confidently.