Tips To Help You Prepare for This Tax Season
By Brian Famigletti, Managing Director & Head of Marketing
Important Changes and Updates
Nothing is certain except death and taxes. But the latter has its fair share of uncertainties too. The Internal Revenue Service (IRS) has made several significant changes recently — and those looking to better prepare for this tax season should take note.
One of the most notable shifts involves the child tax credit. While the credit will remain at $2,000 per child, the refundable portion has increased from $1,600 to $1,700.
Additionally, the threshold to report 1099-K income has decreased significantly, from $20,000 to $5,000, with further reductions expected in the years ahead. This type of income refers to payments from third parties, such as Venmo and PayPal. Should you receive a 1099-K, it is important to verify its accuracy against your own records before filing.
These shifts only scratch the surface of the changes coming to this tax season and beyond. Let’s dive deeper into what to expect and watch out for when preparing to file.
Standard Deductions, Direct File, and Tax Brackets
Historically, most taxpayers have opted to utilize the standard deduction, rather than itemize their deductions. That standard deduction recently got even bigger. In 2024, it has been increased to $29,200 for those married filing jointly and $14,600 for single filers, to adjust for inflation.
Another change is the introduction of the new Direct File tool. Initially launched in 2024, it’s a zero-cost option for taxpayers in select states to file directly with the IRS — assuming they’re filing a relatively straightforward return. After a positive initial response, the IRS has expanded Direct File to 25 states for the current tax season, meaning those who lived and worked in one of those states for the entirety of 2024 can use the tool.
The full list of participating states can be found here.
On top of that, similar to the standard deduction, federal tax brackets have been adjusted for inflation. While the changes are minimal, it is important to gauge your tax bracket throughout the year and watch for certain income thresholds to efficiently file your taxes when tax season approaches.
Broader Shifts
Modifications to tax laws and regulations aside, the IRS itself is experiencing some changes, too.
Its commissioner stepped down in January, and the IRS is under an indefinite hiring freeze as the Trump administration weighs sweeping changes to the Service. These proposed changes include cutting the IRS’s budget by reducing its special funding by $20 billion, which could impact modernization efforts and enforcement of tax-related issues. Moreover, the White House is considering establishing an “External Revenue Service” to direct attention to tariffs.
The April 15 deadline to file your taxes is quickly approaching — although the due date won’t come as fast for those requesting an extension, who will have until October 15th to file. Taxpayers who were impacted by a natural disaster like Hurricane Helene or the wildfires in California may have even longer to file.
Staying informed and consulting with professionals can help taxpayers navigate the ever-changing world of tax regulations. Griffin Asset Management can help you ensure that your portfolio is as tax-efficient as possible. Schedule a consultation today.
Sources:
Kiplinger: Tax Season 2025 Is Here: Key IRS Changes to Know Before You File
NerdWallet: Standard Deduction for 2024 and 2025: Amounts, When to Take
Tax Foundation: 2023 Tax Brackets
Tax Foundation: 2024 Tax Brackets
