As we step into the 2025 tax filing season, it’s crucial to stay ahead of the game and be prepared for any changes that may impact your 2024 tax return. The IRS has rolled out its Tax Time Guide, offering essential information to help taxpayers file accurately and efficiently. Whether you’re a seasoned filer or tackling your taxes for the first time, understanding these updates can make the process smoother and even save you money.
Key Filing Deadlines and Essential Documents
The deadline to submit your Form 1040 or 1040-SR is April 15, 2025. To avoid unnecessary delays or errors, taxpayers should wait until they have received all their necessary tax documents before filing. Double-check your documents for accuracy—any discrepancies should be addressed immediately by contacting the issuer.
One smart move? Set up an IRS Online Account. This gives you secure access to tax records, payment history, and other essential tax details. Keeping organized digital copies of your tax documents can streamline the process and prevent missed deductions or credits.
For those using an Individual Taxpayer Identification Number (ITIN), ensure it is renewed if expired. While the IRS will still accept tax returns with an expired ITIN, processing delays could occur.
Important Tax Changes for 2024
This year brings a few notable updates, including adjustments to the Child Tax Credit (CTC), Earned Income Tax Credit (EITC), and standard deduction amounts.
Additional Child Tax Credit (ACTC) Enhancements
- The maximum ACTC amount has increased to $1,700 per qualifying child.
- Puerto Rico residents are now eligible to claim the ACTC with just one qualifying child, as opposed to the previous requirement of three.
- Refunds for returns claiming the ACTC will not be issued before mid-February 2025.
Standard Deduction Increase
The standard deduction amounts have risen for all filers:
- Single or married filing separately – $14,600
- Head of household – $21,900
- Married filing jointly or qualifying surviving spouse – $29,200
Child Tax Credit Adjustments
- The initial CTC amount remains $2,000 per child.
- The credit begins to phase out for AGI over $200,000 ($400,000 for joint filers).
- Qualifying children must be under 17 years old by the end of 2024.
Earned Income Tax Credit (EITC) Changes
- To claim the EITC without a qualifying child, you must be at least 25 years old but under 65 by the end of 2024.
- For married filers, at least one spouse must meet this age requirement.
Updates to Adoption and Clean Vehicle Credits
- Adoption Credit: The maximum credit is now $16,810 per eligible child, phasing out at a modified AGI of $252,150 to $292,150.
- Clean Vehicle Credit: For new and used clean vehicle purchases, taxpayers can claim the Clean Vehicle Credit using Form 8936.
IRA Contribution Limit Increase
If you’re saving for retirement, there’s good news! The IRA contribution limit has increased to $7,000 (or $8,000 for those 50 and older).
1099-K Reporting Threshold Changes
- Third-party payment platforms (like Venmo, PayPal, and Cash App) will now issue a 1099-K form if transactions exceed $5,000 in 2024.
Free Filing Options
Not sure where to start? The IRS offers multiple free filing options:
- IRS Free File: Available for eligible taxpayers through IRS.gov.
- Direct File: A secure online filing system for taxpayers in participating states with simple returns.
- MilTax: A free tax service for military members, covering multi-state filings and unique military tax situations.
- VITA and TCE Programs: Free in-person tax assistance for qualified individuals. Find a location using the VITA Locator Tool.
Stay Ahead This Tax Season
Navigating tax season doesn’t have to be stressful. By staying informed, organizing your documents, and leveraging available resources, you can file accurately and maximize your tax benefits. For further details, check Publication 17, Your Federal Income Tax (For Individuals), or visit IRS.gov for the latest updates.
Tax season is here—prepare wisely and file with confidence!