A multitude of tax-related changes is set to transform the filing season for taxpayers this year, prompting the Internal Revenue Service (IRS) to encourage early preparation ahead of the official filing season opening, which is typically at the end of January. While the precise date has yet to be announced, the IRS emphasizes that individuals should not wait to begin their preparations.
“Tax planning is for everyone,” the agency stated, highlighting that proactive measures can lead to accurate filings and help prevent delays that may slow down tax refunds. With that in mind, taxpayers should pay close attention to several significant changes affecting how they will file their returns this year.
One of the most notable shifts involves the phasing out of paper checks for tax refunds. The IRS is transitioning to a system where most refunds will be issued exclusively via direct deposit, with only a limited number of exceptions remaining for paper checks. Taxpayers who do not currently have bank accounts are strongly urged to establish one, as refunds sent through direct deposit typically arrive within 21 days of filing.
This year also brings changes to tax laws that include new deductions and credits designed to alleviate tax burdens or increase refund amounts. Key elements of the recently enacted “One Big Beautiful Bill” feature provisions such as the elimination of taxes on tips and overtime, the waiving of taxes on car loan interest, and an expansion of Health Savings Accounts, among others. Taxpayers are encouraged to review these new provisions to maximize their benefits.
Another upcoming change, effective in 2025, stipulates that to claim certain credits for other dependents, taxpayers and their spouses—if filing jointly—must possess valid Social Security Numbers or Individual Taxpayer Identification Numbers issued by the due date of their tax returns.
A novel initiative titled “Trump Accounts” is also set to debut in 2025. Parents and guardians will have the opportunity to establish these accounts by filling out a form when preparing their taxes. Scheduled to go live on July 5, the accounts will be available for children born between January 1, 2025, and December 31, 2028, who possess a valid Social Security number. The government will contribute $1,000 in seed money for eligible children.
In the realm of gig work and online sales, the IRS is reminding taxpayers that all income from part-time employment, gig activities, or sales conducted via platforms like eBay or Etsy is subject to taxation. This year, individuals can expect to receive a Form 1099-K from payment card companies when their transactions exceed $20,000, alongside more than 200 transactions in the calendar year.
Moreover, taxpayers who have engaged in trading digital assets such as cryptocurrency, stablecoins, or non-fungible tokens (NFTs) must report these transactions. Depending on their activities, some might receive a Form 1099-DA from brokers, but all taxpayers are required to address the digital asset inquiry on their Form 1040.
To further streamline the filing process, the IRS recommends that all taxpayers set up an IRS Individual Online Account. These accounts are accessible 24/7 and allow users to manage account information, make payments, adjust communication preferences, and safeguard their tax-related data.
With these updates in mind, the IRS reiterates the importance of preparation and planning ahead, as these proactive steps can ease the tax filing process significantly.
