As the 2025 tax season ramps up, the IRS has announced essential changes that could impact your 2024 tax refunds.
From increased deductions to changes in credits, here’s what you need to know to file accurately and avoid delays.
Filing Deadline and Essential Tips
The deadline to submit Form 1040 or 1040-SR is April 15, 2025. To prevent mistakes and refund delays, wait until you’ve received all necessary documents and verify their accuracy. Any discrepancies should be reported to your employer or payer for correction.
Setting up an IRS Online Account can help you securely access tax information, payment history, and tax records. Keeping digital copies of documents can simplify filing and help you spot overlooked deductions or credits.
Key Tax Updates for 2024
1. Standard Deduction Increase
- Single or married filing separately: $14,600
- Head of household: $21,900
- Married filing jointly or qualifying surviving spouse: $29,200
2. Additional Child Tax Credit (ACTC)
- The maximum ACTC has increased to $1,700 per qualifying child.
- Bona fide residents of Puerto Rico with one or more qualifying children are now eligible.
- Refunds claiming the ACTC will not be issued before mid-February 2025.
3. Child Tax Credit (CTC)
- The initial CTC amount is $2,000 per qualifying child.
- The credit phases out at AGI levels above $200,000 (or $400,000 for joint filers).
- Eligible children must be under the age of 17 as of December 31, 2024.
4. Earned Income Tax Credit (EITC)
- For taxpayers without qualifying children, the age range is now 25 to 64 at the end of 2024.
- For married couples filing jointly, at least one spouse must meet the age requirement.
5. Adoption Credit
- The maximum Adoption Credit is $16,810 per eligible child.
- The credit begins to phase out at a modified AGI of $252,150 and is fully phased out at $292,150.
6. Clean Vehicle Credits
- New and previously owned clean vehicles may qualify for credits reported on Form 8936 and Schedule 3 (Form 1040).
7. IRA Contribution Limits
- For 2024, the limit has increased to $7,000 (or $8,000 for individuals aged 50 or older).
8. 1099-K Reporting Changes
- Third-party payment platforms must report transactions totaling more than $5,000 in 2024.
- Taxpayers should review Form 1099-K instructions for compliance.
Free Filing Options
- IRS Free File: Brand-name tax software is available at no cost for eligible taxpayers.
- IRS Direct File: A free option to file federal tax returns online for taxpayers with simple returns.
- MilTax: Free tax software and support for military personnel through the Department of Defense.
- VITA and TCE Programs: Free tax return preparation for qualified individuals. Use the VITA Locator Tool to find a nearby site.
Avoid Processing Delays
- Wait until all tax documents are received before filing.
- Use direct deposit for faster refunds.
- Ensure your ITIN is current if required.
For more details, check Publication 17: Your Federal Income Tax (For Individuals) on the official IRS website.
Staying informed about these changes will help you file your tax return accurately and maximize your refund. If you need further assistance, visit IRS.gov for additional resources and support.
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