The IRS has released its Tax Time Guide 2025 to help taxpayers file their 2024 tax returns accurately and on time. Filing correctly ensures you avoid penalties and maximize any eligible refunds or credits. Understanding the latest IRS guidance, available deductions, and filing methods can help you streamline the process and avoid common errors.
For the full IRS announcement, visit the official IRS newsroom article.
Key Filing Essentials
Filing a tax return requires gathering the right documentation. Having all necessary forms and personal details in advance will prevent errors and delays. The team at Torkelson & Associates CPAs, LLP have compiled a Tax Time Guide 2025 version of our own, read on for more!
First, ensure you have all personal identification details, including your Social Security Number (SSN) or Taxpayer Identification Number (ITIN). If you’re married or claiming dependents, you’ll need their information as well.
Income statements are crucial for accuracy. This includes forms such as:
- Form W-2 – for wages and salary.
- Form 1099-NEC – for contract work and non-employee compensation.
- Form 1099-DIV – for dividends and distributions.
- Form 1099-INT – for interest income.
- Form 1099-G – for unemployment compensation and state tax refunds.
The IRS encourages taxpayers to sign up for an IRS Online Account to access key tax information, such as payment history and records of estimated payments. Having a digital account allows for faster processing and reduces the likelihood of errors.
If you have an Individual Taxpayer Identification Number (ITIN), you may need to renew it if it has expired. The IRS can still accept your return with an expired ITIN, but there could be processing delays.
Changes and Updates for the 2024 Tax Year
Taxpayers should be aware of several key changes for the 2024 tax year that could affect their filings and potential refunds:
Increased Standard Deduction
The standard deduction for 2024 has been increased:
- Single or married filing separately – $14,600.
- Head of household – $21,900.
- Married filing jointly or qualifying surviving spouse – $29,200.
Learn more about the 2024 standard deduction increase.
Child Tax Credit Adjustments
The Child Tax Credit (CTC) remains at $2,000 per qualifying child under the age of 17. The credit begins to phase out for adjusted gross incomes exceeding:
- $200,000 for single filers.
- $400,000 for joint filers.
Additionally, the Additional Child Tax Credit (ACTC) has increased to $1,700 per child. Bona fide residents of Puerto Rico are now eligible to claim the ACTC with just one qualifying child (previously three were required).
Refunds for returns claiming the ACTC may be delayed until mid-February due to processing rules. For more information, visit the IRS Child Tax Credit page.
Earned Income Tax Credit (EITC) Changes
For the 2024 tax year, to claim the EITC without a qualifying child, taxpayers must be:
- At least 25 years old but under 65 by the end of 2024.
- For married couples, one spouse must meet the age requirements.
More information is available in the IRS EITC guidelines.
IRA Contribution Limit Increase
For 2024, the IRA contribution limit has increased to $7,000 (up from $6,500).
- For individuals aged 50 and older, the limit increases to $8,000.
For more details, see the IRS Retirement Plan Contribution Limits.
Adoption Credit Update
The adoption credit has increased to $16,810 per eligible child for 2024. The credit phases out for taxpayers with modified AGI over $252,150 and is fully phased out at $292,150.
For more information, visit the IRS Adoption Credit page.
1099-K Reporting Threshold Adjustment
Starting in 2024, third-party settlement organizations (e.g., PayPal, Venmo) must report payments over $5,000 using Form 1099-K. This replaces the previous $20,000 threshold.
Learn more about Form 1099-K.
Tips for an Accurate Tax Return
Accuracy is critical for smooth processing and avoiding IRS inquiries. Here are some key steps:
- Wait for All Tax Documents: Ensure you’ve received all tax documents before filing, including W-2s, 1099s, and other income statements. Filing before receiving all documents can lead to errors and processing delays.
- Double-Check Personal Information: Ensure names, Social Security numbers, and birthdates are correct for yourself, your spouse, and any dependents.
- Confirm Filing Status: Whether you’re filing as single, married filing jointly, or head of household, your filing status impacts your standard deduction and tax rates.
- Bank Information for Direct Deposit: Make sure bank details are accurate to avoid refund delays.
Common Tax Filing Mistakes to Avoid
Taxpayers often make avoidable errors that result in processing delay, lost refunds or penalties:
- Incorrect or Missing Names/SSNs: Always verify that names and Social Security numbers match your official records.
- Math Errors: Confirm income amounts match your records and tax documents.
- Incorrect Bank Details: Mistakes in routing or account numbers can delay refunds.
- Supporting Documentation: All credits and deductions must have proper supporting documentation.
- Missing Signatures: Forgetting to sign paper forms can invalidate your return.
- Failing to Report All Income: Even small amounts of interest or dividends need to be reported.
What Happens If You Miss the Deadline?
If you cannot file by April 15, you can request an extension using Form 4868. This gives you until October 15 to file, but you must still pay any taxes owed by the original deadline to avoid interest and penalties.
Late penalties include:
- Late Filing Penalty – 5% of unpaid taxes per month (up to 25%).
- Late Payment Penalty – 0.5% of unpaid taxes per month (up to 25%).
- Interest – The IRS charges interest on any unpaid taxes from the due date until they are paid in full.
For a full list of potential penalties, visit the IRS Penalties Page.
Next Steps for Taxpayers
To prepare for a smooth filing season:
- Start organizing your documents now.
- Use the IRS Online Account to confirm your filing details.
- Double-check for available credits and deductions.
- File electronically for faster processing and fewer errors.
For more information, visit the IRS Forms and Instructions page.
Need Help With Your Taxes?
Tax season can be complicated, especially with new credits and filing requirements. If you need a little more support than this Tax Time Guide for 2025 professional support, Torkelson & Associates CPAs, LLP is here to help. Our experienced team can assist with preparing your return, maximizing your refund, and resolving any IRS issues.
Don’t hesitate to get in touch with a tax expert!