All tax-filing seasons bring complications and this one’s no exception, between new reporting requirements for assets such as crypto to the relatively late arrival of key reporting forms.

“This year is particularly difficult because Congress is still negotiating several tax changes,” said Brian Kearns, a CPA and financial planner with Haddam Road Advisors in Evanston, Ill.

One change he's watching is a proposed increase in bonus depreciation.

"Currently, qualified equipment, machinery, furniture, computers or appliances placed into service in 2023 can only be depreciated at 80% of cost and 60% in 2024," he said. "Congress is looking to bump that back up to 100%.”

Tax season for ultra-high-net-worth clients usually starts heating up in the middle of August, when most wealthy clients’ 1040s will need to report income from partnerships, S corps or trust K-1s, said Matthew Hilbert, director of tax at Pitcairn in Jenkintown, Pa..

“Each of these vehicles has different filing deadlines, including extensions [and] state deadlines may differ from the federal deadlines,” he said.

Late K-1 forms are a frequent cause of tax preparation delays, said Richard Pianoforte, managing director at Fiduciary Trust International located in New York.

“Hedge funds and other alternative products often receive K-1s after the April 15 deadline, so this can cause frequent tax preparation delays," he said.

“These K-1s ... provide a lot of information that necessitates thorough review and accurate reporting," Pianoforte said. "Some of these investments may allocate state-sourced income to states where taxpayers don’t reside, requiring them to file non-resident state tax returns for this income.”

Another challenge for wealthy taxpayers this season is self-reporting digital asset transactions, Hilbert said. “Broker reporting of digital asset transactions has been delayed until 2026 for 2025 transactions,” he said. “Taxpayers will need to track their digital asset activity on their own.”

Mark J. Gilbert, president at Reason Financial Advisors in Naperville, Ill., warned about accounting for qualified charitable donations this season. “Taxpayers who make QCDs from their IRAs don’t report the distribution amount as taxable income,” he said, but “their 1099-R statements fail to exclude the QCD amount from the taxable distribution amount. There’s a danger that the QCD amount will be reported as taxable income.”

Future tax developments also need to be weighed this tax season, advisors say.

“Wealthy taxpayers have [concerns] with the potential of increased tax rates when the tax reductions expire after 2025” among other expiring provisions that impact estate planning, charitable gifting and sales of business, said Donald N. Hoffman, a Baltimore-based partner in audit and assurance at Eisner Advisory Group and president of The Prosperity Consulting Group. “Clients should be aware of this and time income where possible.”

Advisors need to be on top of their clients' investments and when they produce tax information, Pianoforte said.

“It’s important for financial advisors to inquire about the typical timing of tax information issuance by these investments [and] they should inquire about the possibility of these investments generating income from multiple states,” he said. “If a financial advisor can obtain and send K-1 forms or other tax-related documents on behalf of the client, it would streamline the process for both parties.”

Also important is having advisors and tax preparers who communicate with one another.

“Fostering a strong relationship with the client's tax preparer can lead to better outcomes for all parties involved,” said Brett Walters of TBH Advisors in Brentwood, Tenn.