With most pandemic-era policy changes in the rearview mirror, the 2025 tax season is mostly business as usual. Compared to blockbuster years like 2018 and 2022, “there are fewer major changes to the tax code” this time around, says Brian Long, senior tax advisor at Wealth Enhancement.
In general, filing your taxes — which are due April 15 — should feel familiar, because it’s almost exactly how you did them last year. But there are a handful of differences and quirks you may want to have on your radar.
Here’s what’s new for taxes in 2025:
The tax brackets and standard deduction are different
Every year, the IRS adjusts its tax brackets and standard deduction for inflation in a bid to avoid what’s called bracket creep. While the tax rates for 2024 — the taxes we’re filing now — themselves didn’t change, the thresholds for each bracket rose by 5.4%.
It’s easiest to illustrate with an example. In 2023, the lowest marginal tax rate was 10% and covered income up to $11,000 for single filers ($22,000 for married couples filing jointly). For 2024, the lowest marginal tax rate is still 10% — but it covers income up to $11,600 ($23,200 for married filers).
The standard deduction increased, as well, going from $13,850 for 2023 single filers ($27,700 for married couples filing jointly) to $14,600 for 2024 single filers ($29,200 for married filers).
Both of these are good things. They mean taxpayers are able to shield slightly more money from Uncle Sam. And that means you may be able to snag a bigger refund.
Way more people can file taxes for free
The federal government has drastically expanded Direct File, a program that lets certain Americans prepare and submit their federal taxes directly to the IRS at no cost. Direct File was in a testing stage last year, with just 12 states participating; this year, an estimated 30 million people in 25 states qualify to use it.
(There was momentary confusion in early February over whether Tesla CEO Elon Musk had “deleted” the initiative in his bid to trim government spending, but Direct File appears to still be in operation.)
In addition to residency requirements, Direct File has income limits and restrictions on how complex your tax return can be. If you don’t qualify for Direct File, you might be able to use IRS Free File, a similarly named but different initiative that lets taxpayers with incomes under $84,000 access free guided tax prep with a name-brand service. There’s also the Free File Fillable Forms route, which doesn’t have an income limit but does require some tax knowledge.
Third-party tax prep companies have their own free offerings, too.
A handful of tax credits have changed
Lisa Greene-Lewis, certified public accountant and tax expert with Intuit TurboTax, points out that the maximum earned income tax credit has increased to $7,830 for 2024, a $400 boost from its 2023 level. The EITC, as it’s nicknamed, actually just turned 50 years old — but is still overlooked by about 1 in 5 eligible taxpayers, according to the IRS.
Greene-Lewis says other changes to tax credits include that self-employed filers can deduct 2024 business travel at a mileage rate of 67 cents per mile driven, a 1 1/2-cent increase from 2023, and a new way to claim the electric vehicle tax credit (you can claim up to $7,500 at the dealer when purchasing an EV, but it must be reconciled on your taxes).
It’s not a tax credit, but here’s another thing to note: The IRS ratcheted up the IRA contribution limit to $7,000 for 2024 ($8,000 if you’re age 50 or older). The deadline to contribute to your IRA for 2024 falls on April 15, so you still have time to sock away money for retirement before Tax Day.
The 1099-K saga continues
The IRS has been ever-so-slowly implementing new 1099-K reporting requirements for virtual marketplaces and digital payment processors. Although the threshold is eventually going to be $600, for 2024, people who made more than $5,000 selling goods and/or services on sites like StubHub or eBay and taken payment through a service like Venmo or PayPal will receive 1099-Ks.
The actual taxation hasn’t shifted, but the documentation has (and that’s caused a ton of confusion). Greene-Lewis says self-employed folks, online sellers and side giggers should pay careful attention.
“If you are a casual online seller, you may receive a Form 1099-K, but you would not pay taxes on the entire amount reported, and you could actually have a loss,” she adds. “You have to make sure you deduct the cost of the item you sell from the sales price. You will be taxed on the gain and not the full amount of the proceeds.”
For 2025, the 1099-K threshold drops to $2,500.
The IRS is laying off thousands of staffers
Since retaking office in January, President Donald Trump has made it a priority to slash what he sees as unnecessary federal spending. Last month, he began targeting the IRS, where about 7,000 employees were laid off, according to the Washington Post.
More staff reductions could be on the way.
Given the timing, there are a lot of questions about how this will affect the ongoing tax season. Definite answers are scarce, but the Trump administration is reportedly taking a hard look at recent IRS hires, which likely include expanded staff in enforcement (aka audits) and customer service.
While former IRS Commissioner Chuck Rettig said in a statement that “there should not be a significant impact on current filing season operations,” he acknowledged that a lack of staffing and funding will likely decrease the volume of examinations the IRS can conduct — and possibly hurt the agency’s ability to crack down on non-compliers.
The TCJA battle is still looming
Trump is pushing for extensions to a handful of Tax Cuts and Jobs Act provisions that are set to expire this December. Nicknamed the TCJA, the 2017 law significantly changed the way Americans do taxes. Now, it faces a somewhat uphill battle, given the razor-thin margin the Republican party has in Congress.
Although it shouldn’t affect this year’s taxes, this is a political fight you should keep an eye on.
Looking forward, “this is where taxes will change drastically — specifically, areas like higher itemized deductions allowed for state and local taxes, relatively higher tax rates and a halving of the standard deduction are all on the table of what may occur without any legislative intervention,” Long says.
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