News & Updates

This announcement marks the commencement of the Tax Time Guide series. The IRS uses this guide to provide updated information to assist taxpayers in filling an accurate return. A wealth of resources and tools is also available on IRS.gov, including a dedicated special free help page accessible 24/7.

The IRS encourages taxpayers to read Publication 17, Your Federal Income Tax (For Individuals), for additional guidance and updates.

Tips for filing an accurate tax return

The deadline for submitting Form 1040, U.S. Individual Income Tax Return, or 1040-SR, U.S. Tax Return for Seniors, is April 15, 2025. To avoid mistakes and potential processing delays, taxpayers should refrain from filing until they have received all necessary tax documents. Taxpayers should always carefully review documents for inaccuracies or missing information. They should immediately contact their employer or payer to request a correction if issues arise.

The IRS recommends taxpayers create an IRS Online Account, which provides secure access to their tax information, including payment history, tax records and other key information. Maintaining digitally organized tax documents can streamline the preparation of a complete and accurate tax return and may help identify overlooked deductions or credits.

Taxpayers who have an individual taxpayer identification number or ITIN may need to renew it if it has expired. The IRS can accept a tax return with an expiring or expired ITIN, but there may be processing delays.

Updates to Additional Child Tax Credit for tax year 2024

The maximum Additional Child Tax Credit (ACTC) amount has increased to $1,700 for each qualifying child.

Bona fide residents of Puerto Rico are no longer required to have three or more qualifying children to be eligible to claim the ACTC. Bona fide residents of Puerto Rico may be eligible to claim the ACTC if they have one or more qualifying children.

The IRS cannot issue refunds before mid-February 2025 for returns that properly claim the ACTC. This time frame applies to the entire refund, not just the portion associated with the ACTC.

Other changes for tax year 2024

Standard deduction amount increase. For 2024, the standard deduction amount has been increased for all filers. The amounts are:

• Single or married filing separately — $14,600.
• Head of household — $21,900.
• Married filing jointly or qualifying surviving spouse — $29,200.

Child Tax Credit enhancements. Taxpayers eligible for the Child Tax Credit should not wait to file their 2024 tax return. If Congress changes the CTC guidelines in the future, the IRS will automatically adjust for those who have already filed. No additional action will be needed by those eligible taxpayers.

Under current law for tax year 2024, the following currently apply:

• The initial amount of the CTC is $2,000 for each qualifying child. The credit amount begins to phase out where adjusted gross income (AGI) income exceeds $200,000 ($400,000 in the case of a joint return).
• A child must be under age 17 at the end of 2024 to be a qualifying child.

Changes to the Earned Income Tax Credit (EITC). To claim the EITC without a qualifying child in 2024, taxpayers must be at least age 25 but under age 65 at the end of 2024. If a taxpayer is married filing a joint return, one spouse must be at least age 25 but under age 65 at the end of 2024.

Taxpayers may find more information on various child tax credits in the Instructions for Schedule 8812 (Form 1040).

Adoption Credit. The Adoption Credit and the exclusion for employer-provided adoption benefits are both $16,810 per eligible child in 2024. The amount begins to phase out if taxpayers have a modified AGI in excess of $252,150 and is completely phased out if their modified AGI is $292,150 or more. For more information, see Form 8839 PDF and Instructions for Form 8839.

Clean Vehicle Credit. The Clean Vehicle Credit is reported on Form 8936 and Schedule 3 (Form 1040), line 6f. For more information, see Form 8936, Clean Vehicle Credit.

Previously owned Clean Vehicle Credit. This credit is available for previously owned clean vehicles acquired and placed in service after 2022. For more information, see Form 8936, Clean Vehicle Credit.

More information on these and other credit and deduction changes for tax year 2024 may be found in Publication 17, Your Federal Income Tax (For Individuals), taxpayer guide.

IRA contribution limit increased

Beginning in 2024, the IRA contribution limit is increased to $7,000 ($8,000 for individuals aged 50 or older) from $6,500 ($7,500 for individuals aged 50 or older) the prior year.

1099-K reporting requirements have changed for tax year 2024

The reporting threshold for 2024 has changed. Third-party settlement organizations (TPSOs), also known as payment apps and online marketplaces, are now required to report transactions when the amount of the total payments for those transactions in 2024 was more than $5,000. The IRS has issued Notice 2024-85 providing transition relief for TPSOs. To understand what to do, taxpayers should become familiar with Form 1099-K.

Free filing options

IRS Free File, available only through IRS.gov, offers eligible taxpayers brand-name tax preparation software packages to use at no cost. Some of the Free File packages also offer free state tax return preparation. The software does all the work of finding deductions, credits and exemptions.

Taxpayers who are comfortable preparing their own taxes can use Free File Fillable Forms, regardless of their income, to file their tax returns either by mail or online.

Direct File is an option for taxpayers to file federal tax returns online—for free—directly and securely with the IRS. Direct File is a filing option for taxpayers in participating states who have relatively simple tax returns and report only certain types of income and claim certain credits and deductions. Go to IRS Direct File to find more information, including updates to the list of states who have joined and the new tax situations Direct File has added to the service for the 2024 tax year.

MilTax is a free tax resource available to the military community, offered through the Department of Defense. There are no income limits. MilTax includes tax preparation and electronic filing software, personalized support from tax consultants and current information about filing taxes. It is designed to address the realities of military life—including deployments, combat and training pay, housing and rentals, and multi-state filings. Eligible taxpayers can use MilTax to electronically file a federal tax return and up to three state returns for free.

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Most of the information below is also available on the IRS.gov Let us help you page. Taxpayers should follow these handy suggestions as they prepare to file:

1. Gather all important and necessary tax paperwork and records needed for filing a complete and accurate tax return. Errors and omissions can lead to missing a deduction or credit and slow down tax return processing and refunds.
   
   Before filing , taxpayers should have their:
   
   • Social Security numbers for everyone listed on the tax return.
     
   • Bank account and routing numbers.
     
   • Tax forms such as W-2s, 1099s, 1098s, records of digital asset transactions and other income documents.
     
   • Form 1095-A, Health Insurance Marketplace statement.
     
   • IRS letters they may have citing an amount received for a certain tax deduction or credit.
     
2. Report all types of income on the tax return to avoid receiving a notice or a bill from the IRS. Include income from:
   
   • Goods created and sold on online platforms.
     
   • Investment income.
     
   • Part-time or seasonal work.
     
   • Self-employment or other business activities.
     
   • Services provided and paid through mobile apps.
     
3. Avoid paper returns. Filing electronically with direct deposit is the fastest way to get a refund. Plus, tax software helps taxpayers avoid mistakes. It does the math and guides people through each section of their tax return.
   
4. Consider IRS free resources to help eligible taxpayers file.
   
   • IRS Free File provides a free online alternative to filing a paper tax return to any individual or family who earned $84,000 or less in 2024.
     
   • Direct File is available in 25 participating states for eligible taxpayers to file online directly with the IRS for free. This year, Direct File supports reporting more income types and claiming more credits and deductions. The free web-based service – available in English and Spanish – provides access to IRS customer service representatives through a live chat feature and works on mobile phones, laptops, tablets or desktop computers. Direct File guides taxpayers through a series of questions to prepare their federal tax return step-by-step and automatically guides taxpayers to state tools to complete their state taxes.
     
   • People who make over $84,000 can use the IRS' Free File Fillable Forms. These are the electronic version of IRS paper forms. This product is best for people who are comfortable preparing their own taxes.
     
   • People who generally make $67,000 or less, persons with disabilities, limited English-speaking taxpayers and those who are 60 years of age and older, can also find free one-on-one tax preparation help around the nation through the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs.
     
   • The Department of Defense provides MilTax as a free tax resource for the military community. MilTax is a suite of tax services available for members of the military, as well as qualifying veterans and family members. There are no income limits. Eligible taxpayers can use MilTax to electronically file a federal tax return and up to three state returns for free.
     
5. Choose tax filing options based on personal situation and comfort level with tax preparation
   
   • Personally file taxes.
     
   • Use online filing services.
     
   • Hire a tax professional and choose carefully. Most tax return preparers are professional, honest and provide excellent service to their clients. However, dishonest tax return preparers who file false income tax returns do exist. The IRS has a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications and more on choosing a tax pro on IRS.gov.

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Filing the required forms by deadline and without errors not only helps payers and recipients avoid penalties, it also helps the IRS fight fraud by making it easier to verify income information.

The Jan. 31 deadline applies to:

• Employers filing Form W-2, Wage and Tax Statement, and Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration.
• Payers filing Form 1099-NEC, Nonemployee Compensation, with the IRS.

Jan. 31 is also the deadline to:

• Furnish copies of W-2, Form 1099-NEC and other information returns to the recipients. See each form’s filing instructions for the due dates to furnish copies to recipients.

E-filing

Filing electronically is the fastest, most convenient way to accurately submit forms.

As of last year, W-2s and certain other forms must be filed electronically if submitting 10 or more information returns during a calendar year. For more details, including a list of information returns subject to the new e-filing rules, see E-file information returns.

The IRS also offers free e-filing for the 1099 series using the Information Returns Intake System (IRIS), an online portal where users can prepare copies of forms to furnish, file correction and request automatic extensions.

Requesting extensions

While employers and payers may request a 30-day extension to file W-2s or certain information returns, approvals of extensions are not automatic. To request extra filing time, submit Form 8809, Application for Extension of Time to File Information Returns PDF, by Jan. 31 or by the due date of the returns being requested.

Please note that filing a Form 8809 does not extend the deadline for furnishing wage statements to employees or information returns to the payees. Those requests must be faxed to IRS in letter form by Jan. 31. Please see About Form 8809, Application for Extension of Time to File Information Returns, for more information.

Potential penalties

If employers and payers haven’t already, start preparing filings now so there is time to double check the accuracy of the forms and file and furnish them by Jan. 31.

Penalties may apply filings are untimely, inaccurate and/or improperly submitted to the federal government on paper. For more information, including a breakdown of potential penalties and interest, visit the Information Return Penalties page at IRS.gov.

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Income taxes are pay-as-you-go, meaning taxpayers must pay most of their tax throughout the year in which their income is earned or received. Usually this is done by withholding tax from paychecks or by making quarterly estimated tax payments to the IRS (or by a combination of both).

However, taxpayers who pay quarterly sometimes overlook this step, and missing a quarterly payment can result in unexpected penalties and fees when they file their returns in 2025.

Who needs to make a payment?

Taxpayers who earn or receive income that is not subject to tax withholding, such as self-employed people or independent contractors, should pay their taxes quarterly to the IRS.

Taxpayers who owed on their most recent return may find they owe again when they file the following year and should consider making an estimated quarterly payment to avoid a potential tax bill or penalty.

Taxpayers in this situation normally include:

• Those who itemized in the past but are now taking the standard deduction.
• Two wage-earner households.
• Employees with non-wage sources of income such as dividends.
• Those with complex tax situations.
• Those who failed to increase their tax withholding.

What gets taxed?

The IRS reminds people that most income is taxable. This includes unemployment income, refund interest and income from the gig economy and digital assets, such as cryptocurrency and non-fungible tokens (NFTs.) When estimating quarterly tax payments, taxpayers should include all forms of earned income, including from part-time work, side jobs or the sale of goods.

Also, various financial transactions, especially late in the year, can have an unexpected tax impact. Examples include year-end and holiday bonuses, stock dividends, capital gain distributions from mutual funds, and stocks, bonds, virtual currency, real estate or other property sold at a profit.

How to make an estimated tax payment

The best way to make a payment is through IRS Online Account. There taxpayers can see their payment history, any pending payments and other useful tax information. Taxpayers can make an estimated tax payment by using IRS Direct Pay, debit or credit card or digital wallet, or the Treasury Department's Electronic Federal Tax Payment System (EFTPS).

For information on other payment options, visit Make a payment on IRS.gov. If paying by check, taxpayers should be sure to make the check payable to the "United States Treasury."

Act now to avoid a penalty

Either payment method – withholding or estimated tax payments – or a combination of the two, can help avoid a surprise tax bill at tax time and the underpayment of estimated tax by individuals penalty that often applies.

If a taxpayer fails to make required quarterly estimated tax payments earlier in the year, making a payment soon to cover these missed payments will usually lessen and may even eliminate any possible penalty.

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Optional standard milage rates are used to calculate the deductible costs of operating vehicles for business, charitable and medical purposes, as well as for active-duty members of the Armed Forces who are moving.

Beginning Jan. 1, 2025, the standard mileage rates for the use of a car, van, pickup or panel truck will be:

• 70 cents per mile driven for business use, up 3 cents from 2024.
• 21 cents per mile driven for medical purposes, the same as in 2024.
• 21 cents per mile driven for moving purposes for qualified active-duty members of the Armed Forces, unchanged from last year.
• 14 cents per mile driven in service of charitable organizations, equal to the rate in 2024.

The rates apply to fully-electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles.

While the mileage rate for charitable use is set by statute, the mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes, meanwhile, is based on only the variable costs from the annual study.

Under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. And only taxpayers who are members of the military on active duty may claim a deduction for moving expenses incurred while relocating under orders to a permanent change of station.

Use of the standard mileage rates is optional. Taxpayers may instead choose to calculate the actual costs of using their vehicle.

Taxpayers using the standard mileage rate for a vehicle they own and use for business must choose to use the rate in the first year the automobile is available for business use. Then, in later years, they can choose to use the standard mileage rate or actual expenses.

For a leased vehicle, taxpayers using the standard mileage rate must employ that method for the entire lease period, including renewals.

Notice 2025-5 PDF contains the optional 2025 standard mileage rates, as well as the maximum automobile cost used to calculate mileage reimbursement allowances under a fixed-and variable rate (FAVR) plan. The notice also provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in 2025 for which employers may calculate mileage allowances using a cents-per-mile valuation rule or the fleet-average-valuation rule.

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