On 12/19/24, anticipating the 2025 filing season, the IRS published Tax Preparation 2025 Useful Pointers in IR-2024-311: Prepare to file in 2025: Get Ready for tax season with key updates, essential tips. As the 2025 filing season draws near, the Internal Revenue Service (IRS) has urged taxpayers to undertake essential preparations for submitting their 2024 federal income tax returns. The IRS is committed to enhancing taxpayer services by providing a range of digital tools and options designed to facilitate the tax preparation process. Taxpayers are encouraged to register for an IRS Online Account, which can simplify the filing experience and help protect their tax-related information. There are several proactive measures that taxpayers can take to ensure they are adequately prepared.
Tax Preparation 2025 Useful Pointers
Maintaining well-organized tax records significantly facilitates the preparation of a thorough and precise tax return. This practice minimizes the likelihood of errors that could result in delays, thereby prolonging the time it takes to receive a refund. Additionally, it may assist in identifying any deductions or credits that the taxpayer may have previously overlooked.
Before submitting a tax return, gather all necessary tax documents, which include:
- W-2 forms from employer(s)
- 1099 forms from banks, issuing agencies, and other payers, such as those related to unemployment compensation, dividends, pensions, annuities, or retirement plan distributions
- 1099-K, 1099-MISC, W-2, or other income statements if the taxpayer participated in the gig economy
- 1099-INT forms if the taxpayer earned interest
- Other income documentation and records pertaining to digital asset transactions
- Form 1095-A, the Health Insurance Marketplace Statement, to reconcile advance payments or claims for Premium Tax Credits related to 2022 Marketplace coverage
- Correspondence from the IRS or other relevant agencies
- CP01A Notice containing a new Identity Protection PIN
Report to the IRS any address changes and notify the Social Security Administration in the event of a legal name change.
Keep in mind that the majority of income is subject to taxation, which encompasses: Unemployment benefits, Interest income, Earnings from the gig economy and Income derived from digital assets.
Taxpayers may receive a Form 1099-K. Individuals who have received payments exceeding $5,000 for goods and services via an online marketplace or payment application in 2024 should anticipate the arrival of a Form 1099-K in January 2025. The IRS will also obtain a copy of this form. It is crucial for taxpayers to comprehend the significance of receiving a Form 1099-K and how to utilize it in conjunction with their other financial records to accurately determine and report their income on their tax returns. Additionally, taxpayers should be aware of the appropriate steps to take if they receive a Form 1099-K erroneously. In both scenarios, maintaining thorough records is essential and will facilitate a smoother tax filing process.
There have been no modifications to the taxability of income. All forms of income, including earnings from part-time employment, side gigs, or the sale of goods and services, are subject to taxation. Taxpayers are required to report all income on their tax returns unless specifically exempted by law, regardless of whether they receive a Form 1099-K, Form 1099-NEC, Form 1099-MISC, or any other informational return.
Life events, such as purchasing a home, going to college, or losing a job, may make a taxpayer eligible for certain tax benefits. Other circumstances, such as getting married or divorced, welcoming a child, or experiencing the death of a spouse or a dependent a taxpayer claims, could also affect the tax benefit eligibility and filing status. These changes could mean that a taxpayer qualifies for tax credits like the Child Tax Credit (CTC), the Earned Income Tax Credit (EITC), the Child and Dependent Care Credit and Credit for Other Dependents(ODC).
Tax Preparation 2025 also means finding the right Tax Preparer
Choose your tax preparer carefully! Taxpayers are ultimately legally responsible for all the information on their income tax return, regardless of who prepares it. A tax preparer can have different levels of skills, education and expertise and Taxpayers ought to take a closer look at what constitutes a “Qualified” Tax Preparer. There are various types of regulated Tax Preparers, including Certified Public accountants (CPAs), Enrolled Agents, and Attorneys. CPAs, Enrolled Agents, and Attorneys are “Qualified” by IRS regulations to represent Taxpayers in front of State and Federal Government. In addition, there are unregulated Tax Preparers that represent themselves as “Qualified” Tax Preparers. An unregulated Tax Return Preparer is not the same thing as a regulated Tax Preparer.
Know this for tax preparation 2025
Never sign a blank or incomplete return. Taxpayers are responsible for filing a complete and correct tax return. Your tax preparer ought to be available year-round. If questions come up about a tax return, taxpayers may need to contact the tax preparer after the filing season is over. If a Tax Return is inaccurate, the Taxpayer could face an audit, civil penalties, or criminal charges. Taxpayers need to ensure that they are working with the right type of tax preparer to help avoid the financial, reputational, and family costs on non-compliance.
Are you ready for tax preparation 2025?
Have you chosen the right tax professional for your tax preparation 2025? ©
