2025 tax season begins | What to know before you file

Monday marks the first day that the IRS will start accepting and processing 2024 income tax returns.

So whether you're in a rush to get your refund or just wondering how long you can postpone sending your return in, here's what you need to know and some tips to make doing your taxes a little easier.

Be clear on your filing deadline

The official IRS filing and payment deadline this year is April 15, unless you:

Live in a federally declared disaster area: For residents and businesses in such areas, the IRS typically grants extensions for both filing and paying income taxes, plus any other federal tax obligations you may have in a given period. (Specific relief notices by disaster area can be found here on the IRS Web site.) For example, the IRS pushed the tax filing and payment deadlines to October 15 for those in counties affected by the Los Angeles area wildfires.

Can't or don't want to file by April 15: That is okay so long as you apply for an automatic six-month extension by that date. That kind of extension, however, is simply an extension to file your 2024 return, but not an extension to pay what you owe. If you owe any money to the IRS for tax year 2024, April 15 is still your payment deadline.

Figure out if you can file for free

The IRS Direct File program, which lets eligible taxpayers file their taxes directly with the IRS for free, is now available in 25 states, up from 12 last year when the agency piloted the program.

The states are: Alaska, Arizona, California, Connecticut, Florida, Idaho, Illinois, Kansas, Maine, Maryland, Massachusetts, Nevada, New Jersey, New Hampshire, New Mexico, New York, North Carolina, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Washington State, Wisconsin and Wyoming.

In addition, the IRS is partnering with certain private-sector tax preparation software firms that will let you file for free if you qualify. Generally speaking, it is only for filers whose adjusted gross income is $84,000 or less. Beyond that each of the private-sector partners has its own eligibility criteria based on factors such as age, income and state residency, but all offer "active-duty military personnel with an AGI of $84,000 or less in 2024, free tax preparation and filing using IRS Free File," according to the IRS.

Review your 2023 income tax return

Your prior year return will give you a good starting point for figuring out what documents you need to have handy to fill out your 2024 return, said Tom O'Saben, director of tax content and government relations at the National Association of Tax Professionals.

List big changes that happened in 2024

Got married or divorced? Had a baby? Started a side gig for more income? Sold a home or other big investment? Started receiving Social Security or inherited IRA payments? Lost a job and collected unemployment benefits?

Big life transitions and income changes may have a direct effect on your tax liability - including the tax breaks you can take, and the size of your refund - or the amount of additional tax you will owe.

Gather all your 2024 tax documents

While you may receive paper versions of 2024 tax documents, others may only be delivered electronically. So check your mailbox, your email and your relevant online accounts to ensure you have received all the W2s, 1099s, donation receipts and any other income tax information forms you will need from your banks, brokerages, employers, favorite charities, etc.

Watch for new 1099-K forms

If you were paid for goods and services you provided through payment apps or via online marketplaces like Venmo, CashApp, Airbnb and Etsy, you may be getting a 1099-K reporting your transactions if, combined, they exceeded $5,000 for the year. (The old threshold used to be $20,000.)

You might also get a 1099-K if those combined transactions were less than that, especially if you live in Maryland, Massachusetts, Vermont or Virginia, where the reporting threshold is set at $600.

If you get a 1099-K in error - e.g., the form includes transactions that were personal in nature - check this IRS document for some tips on how to correct the situation.

But, generally speaking, the IRS expects you to report all the 1099-K information you receive on your 2024 return. Then adjust for any errors either on that return using Schedule 1 or via an amended return after you filing your original by your filing deadline (which you should do to avoid penalties if you owe money).

Bought an EV? Keep an eye out for this form

If you purchased an electric vehicle, that qualifies for the clean vehicle energy credit or used clean vehicle credit. Your dealer should send both you and the IRS a Form 15400, known as a Clean Vehicle Seller Report. Information from it should be reported on your return to help you claim or reconcile the credit your claim on your return, according to NATP.

Separate chatter from reality on the state and local tax deduction

There is a lot of talk about increasing the state and local tax deduction. None of it applies to your 2024 tax return. Lawmakers may change the deduction going forward but for now it is still capped at $10,000.

So, if you are itemizing your deductions or calculating whether it's worth doing so - which it would be if all your itemized deductions combined exceed your standard deduction - then you will only be able to deduct up to $10,000 for the state and local income, property and sales taxes you paid last year.

What to know about your potential refund

The only real reason most people are eager to file their return is if they're owed a refund.

The majority of all US tax filers typically do get a refund, which the IRS usually issues within 21 days of accepting your return. But the agency notes on its site that if you are claiming an Earned Income Tax Credit, the IRS cannot by law issue the EITC-related refund before mid-February.

To track the status of your refund after you file, you can use the agency's Where's My Refund tool.

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