Crucial Advice for Preparing for Tax Season in 2025:  Essential IRS updates and tips

The IRS has released significant changes and resources to assist taxpayers in properly preparing for the 2025 tax season. You may ensure compliance with federal tax rules and save time and frustration by staying ahead of these developments. Below is a summary of this year’s most significant changes and reminders.

IRS Updates for the 2025 Tax Season:

The IRS has implemented several programs and modifications to expedite the tax filing process and safeguard taxpayer data.

1. Increased usage of the Direct File Application:

The IRS is expanding the availability of its Direct File pilot program for the 2025 tax year. FThisfree online tax preparation service offers a straightforward, cost-free method of filing federal taxes. for taxpayers in states that participate

2. 2025 Inflation Adjustments:

The IRS has modified tax rates, standard deductions, and other inflation-related regulations to account for the growing cost of living. The 2025 tax year’s revised standard deductions are as follows:

• Individual: $15,000.
• Jointly Filing Married: $30,000.
• Household Head: $22,500

3. Improved IRS.gov Taxpayer Resources:

Managing your tax information is now easier than ever, thanks to the IRS’s significant enhancements to its online tools. The improved IRS Online Account has the following features:

• Examining and settling your tax debt.
• Establishing payment schedules.
• Tax transcripts can be downloaded.
• Obtaining electronic copies of IRS notifications.

Pro tip: To ensure your data are correct and current, go into your IRS Online Account before tax season.

4. IP PINs for Identity Protection:

Identity Protection Personal Identification Numbers (IP PINs) are still being promoted by the IRS as a defense against identity theft connected to taxes. Thanks to this six-digit code, only you can use your Social Security number to file a tax return. Starting in January 2025, you can apply for a new IP PIN.

5. Timing and Expectations for Refunds:

The IRS advises taxpayers not to count on getting their refunds by a specific date. Although the majority of refunds for electronically submitted returns with direct deposit are processed within 21 days, there may be some delays for the following reasons:

• The return contains errors.
• Missing data.
• Further IRS review to prevent fraud.

Due to anti-fraud efforts, taxpayers who claim the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) should anticipate receiving their refunds by the middle of February at the latest.

Important 2025 Filing Reminders:

1. Gather your documents early

Ensure you have all the necessary tax documentation before submitting to prevent delays. This comprises:

• Statements of income (such as Form W-2, 1099, and 1099-NEC).
• Transaction records for digital assets.
• Receipts for credits and deductions, such as energy-efficient home upgrades or educational costs.

2. Estimated Tax Payments:

Ensure your projected tax payments are current if you have income not subject to withholding, such as investments, gig labor, or self-employment revenue. You can use IRS.gov’s Tax Withholding Estimator to see if you need to make extra payments to avoid fines.

3. Energy Tax Credits:

Under the Inflation Reduction Act of 2022, you would be eligible for sizable tax credits if you bought a clean car or made specified home energy upgrades in 2024. Get ready to file:

• For home energy credits, use Form 5695.
• For clean car credits, use Form 8936.

4. Early Filing for Quicker Reimbursements:

The IRS advises filing electronically and selecting direct deposit for the quickest refunds. Consider establishing an account at a bank, credit union, or other financial institution that the FDIC guarantees if you don’t already have one.

Why It’s a Good Idea to File Early?

You can save money or receive a refund by filing a return early, even if you are not obligated to.

Some justifications for filing are:

1. Refunds for overpayments: Filing guarantees you will get any refund that is due to you if taxes were deducted from your paycheck.
2. Tax credit claims: You may be eligible for education credits such as the American Opportunity Credit, the Child Tax Credit (CTC), or the Earned Income Tax Credit (EITC).
3. Preventing fines: You may avoid late fees by filing early, mainly if you owe more taxes.