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Prepare for Tax Season 2025: Steps to Take Now for a Smoother Filing Process

Rio Bayani

The 2025 tax season is quickly approaching, and the IRS is encouraging taxpayers to take proactive steps to ensure a smooth filing process for their 2024 federal income tax returns. By taking a few simple actions now, you can reduce stress and avoid delays when filing next year. Here’s a breakdown of essential steps you can take to prepare for tax season 2025.

Preparing for Tax Season 2025

1. Set Up Your IRS Online Account

One of the most effective ways to get ahead of the 2025 filing season is by creating or accessing your IRS Online Account. An online account allows you to:

  • View your most recent tax return details (including your adjusted gross income)

  • Request an Identity Protection PIN (IP PIN)

  • Access account transcripts and wage/income records

  • Sign forms like powers of attorney or tax information authorizations

  • Receive over 200 IRS electronic notices

  • Make payments and set up payment plans

If you haven't set up your online account yet, now is a great time to do so. This simple step can save you time and make your filing process easier.


2. Protect Your Information with an IP PIN

An IP PIN is a six-digit number that helps protect your personal and financial information from identity theft. With this PIN, even if someone else tries to file a tax return using your Social Security number, the IRS will reject it. For the 2025 filing season, the IRS will accept Forms 1040 and 1040-NR, even if a dependent has been claimed on a previously filed return, as long as the primary taxpayer has a valid IP PIN. To sign up for an IP PIN, you can use your IRS Online Account or other available options, such as in-person authentication.


3. Estimated Payments Deadline: January 15, 2025

If you earn non-wage income—such as from self-employment, unemployment benefits, or digital assets—you may need to make estimated payments. To avoid an unexpected tax bill, the IRS recommends using their Tax Withholding Estimator to help determine if additional payments are necessary. Remember, your final quarterly payment for 2024 is due by January 15, 2025.


4. Changes in 1099-K Reporting

Starting in 2024, taxpayers who receive more than $5,000 in payments for goods or services through online marketplaces or payment apps should expect a Form 1099-K. While this change affects the reporting requirements, it doesn’t change the taxability of income—taxpayers must report all income, even if they don’t receive a 1099-K form. Be sure to track and report your income accurately, including any side jobs, gig work, or online sales.


5. Be Ready to Report Digital Asset Income

Just as in previous years, income from digital assets such as cryptocurrencies, NFTs, and virtual currencies must be reported on your tax return. If you had digital asset transactions in 2024, keep detailed records of all your purchases, sales, or trades. During tax filing, you’ll be asked whether you received or disposed of digital assets during the tax year. Answering "Yes" to this question means you'll need to report all associated income, including any capital gains or losses.


6. Understand Refund Timing and Avoid Delays

While the IRS aims to issue most refunds within 21 days, delays can occur for various reasons. If there are errors, missing information, or concerns about fraud, your return may require additional review. Additionally, refunds for those claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) will be held until mid-February.


7. Organize Your Tax Documents

Start gathering and organizing all your important tax documents now. This includes income forms like W-2s, 1099s, and any records for digital assets or side jobs. A well-organized filing system—whether electronic or paper—will help ensure you don’t miss any necessary documents when it’s time to file.


8. Choose Direct Deposit for Faster Refunds

To speed up the process of receiving your tax refund, choose direct deposit. Taxpayers who file electronically and opt for direct deposit receive their refund faster than those who choose a paper check. If you don’t have a bank account, you can explore options such as prepaid debit cards or mobile payment apps.


9. Free Filing Options

Many taxpayers are eligible to file for free through IRS Free File. Seventy percent of taxpayers can use brand-name software to file their federal income tax return at no cost. Those with simple tax returns can also use IRS Free File Fillable Forms, while individuals in participating states can use the Direct File program to file directly with the IRS. If you qualify for free filing assistance, programs like VITA (Volunteer Income Tax Assistance) and TCE (Tax Counseling for the Elderly) can help.


Get Ready Now to Ensure a Smooth 2025 Tax Season

By taking these steps now, you’ll be well-prepared when the 2025 filing season arrives. Setting up your IRS Online Account, understanding new tax rules, and staying organized will save you time and help you avoid unnecessary stress. Stay informed, stay proactive, and you’ll be ready to tackle your taxes when the time comes.


For more information and resources, visit the IRS Get Ready page on IRS.gov to ensure you’re fully prepared for the upcoming filing season.

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