News & Updates

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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The IRS continues to improve taxpayer services to help people prepare for tax season with more digital tools and options available. The IRS encourages taxpayers to sign up now for an IRS Online Account to make tax season easier and help safeguard their tax information.

There are a number of things taxpayers can do to get ready as the end of 2024 nears and the start of the 2025 tax season approaches.

The IRS’s Get Ready page on IRS.gov offers practical tips and resources to help taxpayers prepare. It highlights key updates and important steps for taxpayers to consider to make tax filing easier in 2025.

This reminder is part of a series designed to help taxpayers “Get Ready” for the upcoming filing season. Taking action now can reduce stress and ensure a smoother filing process next year.

Do more with an IRS Online Account

Individuals can create or access their IRS Online Account at Online account for individuals. With an IRS Online Account, they can:

• View key details from their most recent tax return, such as adjusted gross income.
• Request an Identity Protection PIN.
• Get account transcripts to include wage and income records.
• Sign tax forms like powers of attorney or tax information authorizations.
• View and edit language preferences and alternative media.
• Receive and view over 200 IRS electronic notices.
• View, make and cancel payments.
• Set up or change payment plans and check their balance.

Get an Identity Protection Personal Identification Number (IP PIN)

An IP PIN is a six-digit number that prevents someone else from filing a federal tax return using an individual’s Social Security number or Individual Taxpayer Identification Number. It’s a vital tool for ensuring the safety of taxpayers’ personal and financial information.

New for the 2025 filing season, the IRS will accept Forms 1040, 1040-NR and 1040-SS even if a dependent has already been claimed on a previously filed return, as long as the primary taxpayer on the second return includes a valid IP PIN. This change will reduce the time for the agency to receive the tax return and accelerate the issuance of tax refunds for those with duplicate dependent returns.

The best way to sign up for an IP PIN is through the IRS Online Account. If an individual is unable to create an Online Account, alternative methods are available, such as in-person authentication at a Taxpayer Assistance Center. More information is available on how to sign up at Get an identity protection PIN (IP PIN).

Deadline for 2024 last quarterly estimated payment is Jan. 15, 2025

Taxpayers with non-wage income—such as unemployment benefits, self-employment income, annuity payments or earnings from digital assets—may need to make estimated or additional tax payments. The Tax Withholding Estimator on IRS.gov can help wage earners determine if they need to make an additional payment to avoid an unexpected tax bill when filing their return.

1099-K reporting changes

Taxpayers who received more than $5,000 in payments for goods and services through an online marketplace or payment app in 2024 should expect to receive a Form 1099-K PDF in January 2025. A copy of this form will be sent to the IRS as well.

Although the IRS is taking a phased in approach to implementation of the Form 1099-K reporting threshold, there have been no changes to the taxability of income. All income, including proceeds from part-time work, side jobs or the sale of goods and services is taxable. Taxpayers must report all income on their tax return unless it's excluded by law, whether they receive a Form 1099-K or not. The law doesn’t allow taxpayers to avoid taxes on income earned just because they didn’t get a form reporting the payments received.

It is important for taxpayers to understand why they received a Form 1099-K and how to use it along with their other records to figure and report the correct amount of income on their tax return. It is also important for taxpayers to know what to do if they received a Form 1099-K but shouldn't have. In either situation, good recordkeeping is key. Having good records will help make tax filing easier.

Prepare to include digital assets on taxes in 2025

Just like previous filing years, taxpayers must report all digital asset-related income when they file their 2024 federal income tax return. A digital asset is property that is stored electronically and can be bought, sold, owned, transferred or traded. Examples include convertible virtual currencies and cryptocurrencies, stablecoins and non-fungible tokens (NFTs).

If a taxpayer had digital asset transactions last year, they should be sure to keep records that prove their purchase, receipt, sale, exchange or any other disposition of the digital assets and that includes the fair market value, as measured in U.S. dollars of all digital assets received as income or as a payment in the ordinary course of a trade or business.

When filing 2024 federal income tax returns, taxpayers will be asked to answer “Yes” or “No” to the following question:

At any time during the tax year, did you:

(a) receive (as a reward, award or payment for property or services); or

(b) sell, exchange or otherwise dispose of a digital asset (or a financial interest in a digital asset)?

Taxpayers should be prepared to answer the question by reviewing the digital assets landing page and FAQ available on IRS.gov. In addition to checking the "Yes" box, taxpayers must report all income related to their digital asset transactions. Information on how to report digital asset transactions, including calculating capital gain or loss, determining basis and reporting the income on the correct form can also be found on the digital assets landing page.

Understand refund timing and how to avoid delays

Several factors can influence the timing of a refund after the IRS receives a tax return. While the IRS issues most refunds in less than 21 days, taxpayers are advised not to depend on receiving a 2024 federal tax refund by a specific date for major purchases or bill payments. Some returns may require additional review and take longer to process if there are possible errors, missing information, or indications of identity theft or fraud.

Additionally, under the PATH Act, the IRS cannot issue refunds for tax returns claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) before mid-February. The IRS must hold the entire refund—not just the portion associated with these credits—until the review is complete.

Gather and organize 2024 tax documents

To make tax time easier, taxpayers should establish an effective record-keeping system, either electronic or paper, to organize all important documents in one place. This includes year-end income forms such as Forms W-2 from employers, Forms 1099 from banks or other payers, Forms 1099-K from third-party payment networks, Forms 1099-NEC for nonemployee compensation, Forms 1099-MISC for miscellaneous income, Forms 1099-INT for interest income and records of all digital asset transactions.

Having all necessary documentation ensures taxpayers can file an accurate return and reduces the likelihood of processing delays or refund issues.

Use direct deposit for a faster refund

Filing electronically and selecting direct deposit remains the fastest and safest way for taxpayers to receive their 2024 tax refunds. Direct deposit ensures quicker access to refunds compared to receiving a paper check.

For those without a bank account, resources are available to help. Individuals can learn how to open an account at an FDIC-insured bank or use the national Credit Union Locator tool. Veterans can explore the Veterans Benefits Banking Program for financial services at participating banks.

Tax refunds can also be deposited onto prepaid debit cards or through mobile payment apps, provided they have routing and account numbers. Taxpayers should confirm with the mobile app provider or financial institution which numbers to use when completing their tax return.

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