Tax time: What’s new for tax season 2025

Tax season is officially underway! Whether you file yourself or hand things off to an accountant, there are a few changes to be aware of when preparing to file your return—especially if this is your first time filing. The April 15th deadline will be here soon, so we’ve put together this list to help you file your taxes with confidence—even if you wait until April! Here’s what to know about filing your 2024 tax return:

New for 2024

Updated income brackets

The IRS updates the tax brackets annually to account for inflation. While there are still seven federal income tax brackets, the marginal rates have changed. For details on the new brackets, click here. These new brackets only apply to income earned during the 2024 calendar year.

Standard deduction amount increase

Also adjusted for inflation, the standard deductions have increased across the board. For 2024, the amounts are:

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

Increased contribution limits

Another change this year involves contribution limits. For 2024, total IRA contributions can’t exceed $7,000 (or $8,000 if you’re age 50 or older). Additionally, contribution limits for tax-deferred 401(k)s and Roth 401(k)s have also increased to $23,000, or $30,500 if you’re age 50 or older. Don’t forget—you have until Tax Day to make your final 2024 contributions, so be sure to take advantage of the increased limits.

Enhanced child tax credits

In 2024, Congress approved the expansion of the popular Child Tax Credit (CTC) to allow more families across the United States to qualify for this benefit—and receive more money on their tax refund. For 2024, the initial CTC amount of the CTC is $2,000 for each qualifying child. Furthermore, the Additional Child Tax Credit (ACTC) amount has increased to $1,700 for each qualifying child. As a note, if a future change affects your return, the IRS will automatically adjust for those who’ve already filed, so be sure to file as soon as possible.

Clean Vehicle Credit

In 2023, new tax credits were introduced for those with electric vehicles (EV) and energy-related enhancements to houses like solar panels. It’s important to review those changes to see if you qualify for these expanded credits—even if you bought an electric vehicle before the credit was enacted. Those who bought a new, qualified plug-in EV in 2022 or before may also be eligible for a clean vehicle tax credit up to $7,500. If you qualify, make sure to submit all appropriate forms.

How to stay ahead

Gather 2024 tax documents

The end of January means an influx of tax forms in the mail or your email inbox. Your employer will send you a W-2, which reports how much you were paid, the amount of taxes withheld, and what you contributed to your company’s retirement plan (if they have one available). You’ll receive a W-2 from each employer if you work multiple jobs.

You’ll receive a 1098 form if you have a mortgage, which shows the amount of interest you paid on your home loan (which is usually deductible). If you paid student loan interest, you’ll get a 1098-E. Form 1098-T reports any tuition payments made.

1099 forms report payments from sources that aren’t your employer. There are several types, but the most common are 1099-DIV, 1099-INT, 1099-MISC, 1099-NEC, and 1099-K. 1099-DIV is used by banks or other financial institutions to report any dividends you may have received. Those dividends are also considered interest, which is reflected on Form 1099-INT. You’ll receive a 1099-INT if you were paid more than $10 in interest.

1099-MISC reports any miscellaneous income, like prizes or awards. 1099-NEC reports nonemployee compensation and is common for freelancers, people who are self-employed, or anyone who has a side gig.

A 1099-K is issued to anyone who received $20,000 or more in business income or payments for products and services from third-party payment networks, like Venmo or Cash App.

You’ll also need Form 1095-A if you have health insurance through the Marketplace.

Having all of your necessary tax documents together before filing will help you avoid errors and potential processing delays.

Get online

Exciting news on the digital front! If you have a Social Security number or an Individual Taxpayer Identification Number (ITIN), you can now easily access the information needed to file your return. This can be helpful when filing yourself, allowing you to see key information from your most recently filed tax return, including adjusted gross income, without having to dig through your files. You can also set up and manage payment plans, and even cancel scheduled payments. Visit irs.gov/payments/your-online-account to access your records.

Get refunds faster with direct deposit

Filing electronically and choosing direct deposit is the quickest way to get your tax refund. It’s faster than having a paper check mailed to you and avoids any chance of your refund check being lost, stolen, or sent back to the IRS as undeliverable.

Key takeaways

• Both income brackets and standard deductions have been adjusted for inflation
• Check to see if you qualify for credits like the Child Tax Credit or Clean Vehicle Credit
• Access your previous year’s tax return and other important documents in your IRS Online Account
• Have your tax documents prepared ahead of time to help maximize your refund and avoid errors or potential processing delays

Remember—if your adjusted gross income (AGI) is less than $84,000 annually, you qualify to file your return for free using the IRS’s Free File program. If you’re preparing your taxes yourself, the IRS also provides federal Free File Fillable Forms for any income level. Additionally, eligible taxpayers can use MilTax, a free tax resource offered through the Department of Defense.

The Where’s My Refund tool allows you to track when you’ll receive your refund after your return is accepted by the IRS. April 15th will be here before you know it, so allow yourself plenty of time to file to ensure there are no errors. Keep these tips in mind, and tax season will be a breeze.