2025 Tax Season Opens

Is it that time of year already? No, not the Super Bowl or the Academy Award countdown, the 2025 tax season officially opens on January 27th. Cue the groans, OK, that’s enough, let’s get busy! The IRS expects more than 140 million individual tax returns to be filed for tax year 2024. Although there has not been a new sweeping overhaul to the code, there are some changes that could alter your tax filing approach this year.

Tax Filing Deadline:  For most taxpayers, the deadline to file their personal federal tax return, pay any tax owed or request an extension to file is Tuesday, April 15, 2025. Taxpayers who reside in a federally declared disaster area will have more time to file. The IRS announced that CA wildfire victims will have until October 15, 2025, to file various federal individual and business tax returns, to make tax payments, and to make 2024 contributions to IRAs and health savings accounts. Victims of other natural disasters, like Hurricanes Milton and Helene, should check the IRS website for their specific deadlines.

Prepare Now: Bookmark the IRS.gov website and check out the “Get Ready” section. You will need to gather all of your relevant information, like Social Security numbers and this year’s Identity Protection Personal Identification Numbers (IP PIN). Collect all income related documents, like W2s, 1099s, unemployment benefits received, dividends, pensions, annuities, or retirement plan distributions.

Use IRS Free File: This service lets you file your federal taxes at no extra cost either through electronic fillable forms or through IRS partnerships with private tax preparation services. It’s open to taxpayers with Adjusted Gross Income (AGI) of $84,000 or less in 2024. If your AGI is above $84,000, you can use Free File Fillable Forms, the electronic version of paper forms.

Consider Direct File: The IRS has expanded its Direct File, program which allows taxpayers to file their 2024 federal (not state) tax return online, for free, directly with the IRS. In addition to last year’s 12 pilot states, 13 new states are participating this year. Also, this year, Direct File will cover more tax situations. To determine if you can use the program, go to https://www.irs.gov/filing/irs-direct-file-for-free.

Skip the Paper, File Electronically: Many of the headaches that taxpayers encounter, including easily avoidable errors and long wait times for refunds, could be sidestepped if everyone filed electronically and used direct deposit. If you are due a refund, electronic filers with direct deposit usually receive it within 21 days.

Decide Whether to Engage a Pro or Go It on Your Own: It’s tough to find someone to help with your taxes in April, so now’s the time to figure out whether or not it is necessary. If you have a complicated financial life, consider paying up for a professional. For example, small business owners and those who are self-employed may want someone who is familiar with Schedule C and who will let you know when you should file a Form 1099 to report any payments you made to others. If you had a lot of investment activity, sold property, or have to file an estate tax return for a deceased family member, you may also want guidance. Check out the IRS website for tips on how to choose a tax professional

Claim Your Credits and Deductions: The IRS released a report that found that many taxpayers don’t claim the credits and deductions for which they are eligible. The agency used tax year 2022 as a baseline for the analysis and the estimated numbers are staggering for tax filers, billions of dollars left on the table!

  • Earned Income Tax Credit (EITC): 470,000 taxpayers missed out on $864 million

  • Child Tax Credit (CTC): 110,000 taxpayers missed out on $133 million

  • Education Credits (American Opportunity Tax Credit and Lifetime Learning Credit): 6 million taxpayers missed out on $6.3 billion

Access IRS Resources: After receiving additional funding, service has improved dramatically at the IRS over the past two years. Wait times averaged less than 5 minutes on the main phone lines and there were “significant increases” in the number of taxpayers served at Taxpayer Assistance Centers across the country. This year, the IRS will expand its help, with the use of AI. Check out IRS voicebot services by clicking on the “Chat” button in the lower right corner of the webpage.

Here are a few more resources to help guide you through the filing process:

  • IRS’ Where’s My Refund? Tool: You can check the status of your 2024 income tax refund within 24 hours of e-filing. Refund information is normally available after four weeks for taxpayers who filed a paper return. 

  • Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE): IRS certified volunteers provide free tax help to eligible filers. VITA offers guidance to those who earn $67,000 or less, have a disability, or need language support. TCE focuses on those who are 60 years of age and older, specializing in questions about pensions and retirement-related issues unique to seniors.

  • MilTax: A Department of Defense program, which generally offers free return preparation and electronic filing software for federal income tax returns and up to three state income tax returns for all military members, and some veterans, with no income limit.

SCAM WARNING: Finally, the opening of tax filing season also means that the criminals will be on the prowl. The IRS announced that it has added “a new banner on the Online Account homepage that alerts taxpayers of potential scams and schemes, along with a link to their Digital Notices and Letters page to view correspondence sent to them from the IRS.” You can check out the basic scams here. The IRS has also flagged certain communications that should raise a red flag:

  • A tax transcript in the mail from the IRS that you didn’t order.

  • An Employer Identification Number that you didn’t request.

  • A Form W-2 from an unknown employer.

  • An unexpected notice or email from a tax preparation company that asks you to confirm access to an existing online account, disable an existing online account, or confirm a new online account.

  • A letter from the IRS, during a year you didn’t earn income or file a tax return, that says: You owe additional tax; a balance due offset a refund; or collection actions were taken.