Tax season 2025: Everything you need to know about deadlines, refunds, audits and more
Brace yourself, folks. It’s tax season again. Starting January 27, the Internal Revenue Service (IRS) will be taking and processing 2024 tax returns once again.
Good news? The IRS is looking like they are improving. The 2024 report by the National Taxpayer Advocate, a watchdog agency that oversees the IRS, reports, “For the first time since I became the National Taxpayer Advocate in 2020, I can begin this report with good news: The taxpayer experience has noticeably improved.” That may translate into quicker refunds and friendlier customer service. Still, for many taxpayers, the process remains opaque. Luckily, free help is available with preparing taxes and extensions are always available.
Some of the most common tax questions and answers are listed below:
When does tax filing season start?
The IRS will begin accepting and processing 2024 tax year returns on January 27.
This is one of two high periods for the IRS because many folks who have very straightforward filings or are anticipating large refunds do not wait and file. Other people may have to hold on until all relevant information has arrived or until they believe they will owe some money.
When are my 2024 taxes due?
Taxes for the tax year 2024 are due on Tuesday, April 15. Residents of California who suffered losses from wildfires have an extension to October 15, and those who suffered losses from Hurricanes Helene or Milton have until May 1.
If you can’t file your return by these dates, you can request an automatic six-month extension of time to file, which moves your filing deadline to October 15. Members of the Armed Forces serving in combat zones or contingency operations and those hospitalized due to injuries incurred in these areas are eligible for special rules. These taxpayers have 180 days after they leave the combat zone or hospitalization to file and pay their taxes.
What is the standard deduction for tax year 2024?
The following are the standard deductions for 2024:
Married Couples filing Jointly: $29,200 – $1,500 increase
Single Taxpayers and married persons filing separately: $14,600 – $750 increase
Head of Household: $21,900-$1,100 increase
How long does it take to get my tax refund back from the IRS?
Normally, IRS generally processes returns and issues refunds in less than 21 days.
In 2024, the average tax refund for the 2023 tax year was about $3,050—5% higher than the previous year. Over 163 million individual tax returns are expected for the 2024 tax year, with most filed before the traditional April deadline. To track your refund, use the IRS’s “Where’s My Refund?” tool, which updates daily.
What is the fastest way to get my refund?
To expedite your refund, the IRS recommends e-filing your taxes, which enters your information into their system more quickly than paper filings.
Additionally, signing up for direct deposit can significantly speed up the refund process. It also provides flexibility, allowing you to split your refund into up to three separate accounts, including Individual Retirement Accounts (IRAs).
I bought and sold cryptocurrencies last year. Will that affect my 2024 taxes?
Yes, it might, depending on when and if you sold your cryptocurrencies.
Cryptocurrencies are taxed under capital gains. The amount you owe is based on the gains or losses and the duration you held the assets. If you held your assets for more than a year, you are subjected to long-term capital gains, taxed at rates of 0% to 20%. Short-term capital gains, for items held less than a year, would be taxed up to 37%. Hopefully, your exchange will generate a Form 1099-B summarizing your gains and losses, but not all exchanges have been reliable in this regard.
I traded meme stocks in 2024. What tax liability can I expect?
Like cryptocurrency, up to 37% could be applied in terms of short-term capital gains on meme stocks sold within a year from purchase.
What happens if I file my taxes late?
The IRS can impose two penalties when filing taxes late: a late-filing penalty and a late-payment penalty for paying overdue taxes.
The minimum penalty for return more than 60 days late is $485 or 100% of the unpaid tax, whichever is smaller. Beyond this, you can get penalties of up to 5% of the unpaid tax every month. Penalties cannot go beyond 25%. Penalties can be waived if you get a payment agreement with the IRS. You can make applications for an extension or show reasonable cause for delay to avoid penalties. If you have filed previously without delays, you may be eligible for the First Time Abatement program, which excludes penalties.
How do I increase my refund amount next year?
With the 2017 tax cuts set to possibly expire, taxpayers might want to strategize ahead of time to avoid unexpected bills. The IRS’s Tax Withholding Estimator calculator is a great tool. You can set a specific refund target and adjust your withholding accordingly.
The good news is that your withholding for income taxes now depends on the filing status you anticipate and standard deduction, instead of marital status and allowances. You can further adjust for itemized deductions, the Child Tax Credit, and other tax benefits when determining your withholding.
You will have less anxiety over tax season, and possibly maximize your refund if you prepare, make use of available tools, and file properly.