It’s hard to believe, but the tax season for 2025 has been in full swing for a while, and the clock is ticking toward the April 15, 2025, filing deadline for your 2024 tax return. But before you rush to file, it’s essential to understand the critical updates to the tax code this year that could impact your refund and help you save money. Whether you’re a first-time filer, a seasoned tax veteran, or somewhere in between, the IRS has made key changes to standard deductions, child tax credits, and IRA contribution limits you won’t want to miss.
Here are all the essential updates and practical filing tips to help you prepare a complete and accurate tax return.
Tips for Filing an Accurate Tax Return in 2025
The first step in a successful tax filing process is ensuring you have all the necessary documents before you begin. The deadline to submit your 2024 tax return is April 15, 2025. You have some time, but it’s important to get organized early.
File Only After Receiving All Necessary Documents
Filing as soon as possible may be tempting, but the IRS strongly recommends waiting until you receive your tax documents. Common documents to look out for include W-2s, 1099s, and other income statements. Filing prematurely without these forms can lead to mistakes, processing delays, and potential audits.
Review Documents Carefully
Tax documents often contain crucial information that could impact your refund or the amount you owe. Carefully review each one for any discrepancies. If you find errors, contact the issuer (whether it’s your employer or a bank) immediately to request a correction.
Use the IRS Online Account
The IRS offers an Online Account where you can securely access your tax records, including past returns and payment history. This tool can help keep track of your financials and ensure you have all the necessary information for an accurate filing.
ITIN Renewal
If you’re filing with an Individual Taxpayer Identification Number (ITIN), check to see if it’s expired. While the IRS can still process your tax return with an expired ITIN, doing so may delay processing your refund. Make sure your ITIN is up to date to avoid unnecessary setbacks.
2. Major Tax Law Changes for The 2024 Tax Year
The IRS has made some updates for the 2024 tax year, and these changes can make a huge difference in how much you pay or save when filing your return.
Increased Standard Deduction Amounts
The standard deduction has gone up slightly for 2024. Here’s the new breakdown:
- Single or Married Filing Separately: $14,600
- Head of Household: $21,900
- Married and Filing Jointly: $29,200
- Qualifying Surviving Spouse: $29,200
The increased standard deduction could reduce your taxable income, lowering your overall tax liability. If your itemized deductions don’t exceed these amounts, it’s likely a better choice to take the standard deduction and save time on complicated paperwork.
Child Tax Credit (CTC) Enhancements
The Child Tax Credit (CTC) is still a powerful tool to reduce your taxes, and it’s been enhanced for 2024. Here’s how it works:
- $2,000 for each qualifying child under the age of 17.
- The credit starts phasing out if your adjusted gross income (AGI) exceeds $200,000 for single filers or $400,000 for joint filers.
Remember, if the guidelines for the CTC change later in the year, the IRS will automatically adjust your tax return to account for these changes—so there’s no need for you to worry about future legislation once you’ve filed.
Revised Earned Income Tax Credit (EITC)
The EITC has also seen changes that will affect some taxpayers:
- Without qualifying children, you must be at least age 25 but under 65 at the end of 2024 to claim the credit.
- If you’re married and filing jointly, at least one spouse must meet this age requirement.
The EITC is designed to help low- and moderate-income workers, and the amount of credit depends on your income and family size. If you’re eligible, be sure to claim it, as it can provide a substantial refund.
4. Adoption Credit
If you’ve adopted a child or received employer-provided adoption benefits, the Adoption Credit has increased for 2024:
- The maximum credit is $16,810 per eligible child.
- The credit starts phasing out if your modified AGI exceeds $252,150 and is fully phased out at $292,150.
If you’re adopting, this credit can provide significant financial relief, but check the eligibility requirements, especially the income limits.
5. IRA Contribution Limits and Other Retirement Tax Updates
For those contributing to IRAs or saving for retirement, the contribution limits have been updated for the 2024 tax year:
- IRA Contribution Limit: Increased to $7,000 (or $8,000 for those aged 50 or older).
- This is an increase from the prior year’s contribution limit of $6,500 ($7,500 for those over 50).
If you plan to contribute to your retirement, this increase allows you to save even more, potentially reducing your taxable income.
6. Changes to 1099-K Reporting
For those who use third-party payment services like PayPal, Venmo, or online marketplaces like eBay, it’s important to note that the reporting threshold for the 2024 tax year has changed. These platforms must report when taxpayers’ total transaction payments exceed $5,000.
This change will likely affect freelancers, gig economy workers, and anyone selling goods online. Ensure you know the new Form 1099-K reporting requirements and how they may impact your tax return.
7. Free Filing Options and Resources
If you want to save money and make the process easier, take advantage of the IRS’s free filing options.
- IRS Free File: Available to eligible taxpayers and provides access to brand-name tax software to file your return for free. Some of these packages even offer free state tax filing.
- Free File Fillable Forms: The IRS offers free forms that taxpayers can file electronically or by mail for those who can prepare their taxes.
- MilTax: A free service for military families that provides tax software and personalized support.
These free resources can help you save time and money while ensuring you file your taxes accurately.
Preparing for a Stress-Free Filing Season
Tax season doesn’t have to be stressful if you’re prepared. With the 2025 tax filing season upon us, now is the time to get organized and familiarize yourself with the important updates for the 2024 tax year. The IRS offers a wealth of resources, so take advantage of them to make this tax season as smooth as possible.
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