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2025 Tax Season IRS Updates

The U.S. Internal Revenue Service ("IRS") has announced that the 2025 tax season will begin on Monday, January 27, 2025, and will feature expanded and enhanced tools to assist taxpayers. These improvements are part of the IRS's historic modernization efforts. Below is a key summary of the 2025 tax season announcement:

2025 IRS Announcement
Key Summary

  • Key Dates

    • Tax filing season starts Monday, Jan. 27, 2025, for 2024 tax returns.

    • Federal filing deadline: Tuesday, April 15, 2025.

  • Tax Professional Advice

    • About half of all returns will use tax professionals.

    • The IRS advises working with trusted tax pros to avoid scams.

  • IRS's New Tools

    • Improved access to tax accounts via text, voice assistants, and expanded online account features.

    • Tax forms accessible on mobile devices.

    • Enhanced scam alerts.

    • Direct File Tool: Imports data from IRS accounts (e.g., W-2 info, IP PIN).

    • New chatbot to assist Direct File users.

  • Tax Refunds:

    • Most refunds issued within 21 days for e-filers.

    • Use the “Where’s My Refund?” tool to track refund status (updates daily).

    • Paper returns: Refund status available 4 weeks after filing.

  • Filing Recommendations:

    • E-filing with direct deposit is safest, fastest, and avoids issues with paper checks.

    • Paper refund checks are 16 times more prone to issues like loss or theft.

  • IRS Statement:

    • Commissioner Danny Werfel highlighted ongoing efforts to improve taxpayer tools and services, emphasizing the need for continued investment in the tax system.


   1.    Standard Deductions:
   •    Single/Married Filing Separately: $15,000 (+$400 from 2024).
   •    Married Filing Jointly: $30,000 (+$800).
   •    Head of Household: $22,500 (+$600).


   2.    Marginal Tax Rates:
   •    Top rate of 37% applies to incomes >$626,350 (single) and >$751,600 (married filing jointly).
   •    Other brackets: 35%, 32%, 24%, 22%, 12%, and 10%, with thresholds adjusted slightly.


   3.    Alternative Minimum Tax (AMT) Exemptions:
   •    Unmarried: $88,100 (+$2,450 from 2024), phasing out at $626,350.
   •    Married Filing Jointly: $137,000 (+$3,800 from 2024), phasing out at $1,252,700.


   4.    Earned Income Tax Credit (EITC):
   •    Maximum EITC for 3+ qualifying children: $8,046 (+$216 from 2024).


   5.    Qualified Transportation Fringe Benefit:
   •    Monthly limit: $325 (+$10 from 2024).


   6.    Health Flexible Spending Accounts:
   •    Contribution limit: $3,300 (+$100 from 2024).
   •    Carryover limit: $660 (+$20 from 2024).


   7.    Medical Savings Accounts:
   •    Self-only coverage:

  •   Deductible: $2,850–$4,300 (+$50 to $150 from 2024).

  •   Out-of-pocket limit: $5,700 (+$150 from 2024).

   •    Family coverage:

  •    Deductible: $5,700–$8,550 (+$150 to $200 from 2024).

  •    Out-of-pocket limit: $10,500 (+$300 from 2024).


   8.    Foreign Earned Income Exclusion:
   •    Limit: $130,000 (+$3,500 from 2024).


   9.    Estate Tax Exclusion:
   •    Basic exclusion: $13,990,000 (+$380,000 from 2024).


   10.    Gift Tax Exclusion:

    •    Annual limit: $19,000 (+$1,000 from 2024).

​

    11.    Adoption Credit:

    •    Maximum: $17,280 (+$470 from 2024).

Notable Changes for Tax Year 2025

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