The 2025 tax season is well underway, which means many taxpayers are already seeing tax documents arrive in mailboxes and inboxes. Returns for 2024 are now being accepted by the Internal Revenue Service (IRS) and are due Tuesday, April 15, 2025. The IRS expects to have more than 140 million individual tax returns filed this season.
As taxpayers navigate the challenges of tax season, the American Institute of CPAs (AICPA) is identifying areas individual filers to be aware of for this filing season:
- Tax bracket changes: The IRS announced adjustments for more than 60 tax provisions, including the tax rate schedule. These adjustments mean that the income limits for each tax bracket have increased, which could result in a lower tax bill for some taxpayers where their income has remained the same.
- Standard deduction increases: The standard deduction amount for 2024 has increased for all taxpayers Single or married filing separately: $14,600; married filing jointly or qualifying surviving spouse – $29,200; head of household – $21,900.
- Form 1099-K: This is a form for the taxpayer that reports payments received for goods or services during the year from credit, debit or stored value cards such as gift cards (payment cards), or payment apps and online marketplaces, also referred to as third party settlement organizations (i.e. PayPal, Venmo, Zelle, Etsy, etc.). The IRS has delayed the scheduled reduction in the reporting threshold of Form 1099-K and reporting will be required for payments totaling greater than $5,000 during 2024. This threshold will lower to more than $2,500 in 2025 and more than $600 in 2026 and subsequent years. Also new for 2024, if you received a Form 1099-K in error or that shows payments for personal items sold at a loss, you can now enter it in a new box placed at the top of Schedule 1.
- Electric vehicle purchase: This clean vehicle credit of up to $7,500 is available for qualified new vehicles. There are specific qualifications that must be met and information that must be obtained from the seller in order to qualify, including final assembly location, manufacturer’s suggested retail price, battery component and critical minerals sourcing. Buyers may also be able to transfer their clean vehicle credit to the dealer and receive the amount of the credit as a discount on the vehicle.
- Used electric vehicle purchase: Used electric vehicles may be eligible for a tax credit up to the lesser value, either $4,000 or 30 percent of the vehicle sale price. Like the new clean vehicle credit, there are requirements that must be met to qualify for the credit.
- Retirement Plan Contributions: The maximum contribution limits for 401K plans increased to $23,000 for 2024 ($30,500 if you are 50 and over). The maximum contribution limit for traditional and Roth IRAs increased to $7,000 ($7,500 if you are 50 and over).
“Start gathering your documents early, get organized and don’t wait until the last minute to file your return,” says Liz Young, AICPA Director – Tax Practice & Ethics. “If you are looking for a qualified tax preparer, start your search now. Ask friends and family for references and make sure to do your research.”
Disaster Relief & Recovery
If the IRS determines you to be affected by a federally-declared disaster, a significant fire or a terroristic or military action, you may have up to one year after the due date of your return to file and pay taxes, depending on the deadline specified by the IRS. Additional information from the IRS can be found here. Affected taxpayers should also be aware of scammers trying to target taxpayers by offering to “help” you file casualty loss claims and promising big refunds.
Charitable Donations
Many taxpayers chose to make charitable donations to aid victims of multiple natural disasters this year. You can deduct up to 60 percent of your Adjusted Gross Income (AGI) if you gave cash to standard public charities It’s also important to note that contributing to a “Go Fund Me” or some other non-public entity is not deductible, irrespective of the purpose that the collected funds will be used for. If you donated appreciated assets (stocks, bonds, real estate, etc.), the maximum deduction for tax year 2024 is 30 percent of your AGI. It is important to retain proper documentation from the charity supporting the contribution, whether it is in cash or property. For a cash contribution of $250 or more, you should obtain written acknowledgement from the charity which shows the name of the organization, the amount and the date of the contribution. For a non-cash contribution, you should also obtain a detailed description of the property.
Other Scams
In addition to scams related to natural disasters, taxpayers should be aware that fraudsters may try to impersonate IRS agents using a variety of methods, especially this time of year. The IRS states that they will NOT initiate contact with taxpayers by email, text message or through social media platforms to request personal or financial information. Take precautions to keep your personal information, especially your social security number, secure. Consider obtaining an
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