Get Ready for the 2025 Tax Season

Important Updates You Need to Know

Tax season is here, and this year brings some big changes. Some of these changes could save you money. Others will help protect you from fraud. We've put together this guide to help you understand what's new and what you need to do.

    Quick Action Items:
    Consider setting up your online IRS account (we can help if needed)
Think about getting your Identity Protection PIN for added security
Learn about new deductions you might qualify for
Choose direct deposit for faster refunds

We Encourage You to Set Up an Online IRS Account

We understand that setting up online accounts can feel overwhelming, especially if technology isn't your thing. However, an online IRS account can make your life much easier. The IRS has gone through major staffing changes. This means:

Very long phone wait times - Sometimes hours on hold
Slow mail processing - Letters can take weeks or months to get answered
Limited in-person help - Fewer offices are open to the public

What you can do with an online account:

Check your account balance and payment history
See your tax records and past returns
Make payments or set up payment plans
Get your tax transcripts instantly
View and respond to IRS notices
Get your Identity Protection PIN (see below)

If you're comfortable with technology, setting up your account is straightforward. If you need help or would rather not do it yourself, that's okay too. We're here to guide you through the process or answer any questions.

Learn About IRS Online Accounts

Consider Getting an Identity Protection PIN

Why we recommend this: When someone files a fake tax return using your information, it takes an average of 602 days (in 2024 which is down from 672 in 2023)to resolve. That's over a year and a half of delays getting your refund!

We strongly encourage you to get an Identity Protection PIN (IP PIN). This is a six-digit number that protects your tax return from identity theft. Once you have a PIN:

No one can file a return without it - Even if they have your Social Security number
You get a new PIN each year - Access it through your online IRS account
It's free - No cost to sign up or use
Peace of mind - One less thing to worry about

Who should get one:

Anyone who wants extra protection (we recommend everyone)
People who have been victims of identity theft in the past
Anyone who has had tax issues due to fraud

You access your IP PIN through your online IRS account (mentioned above). We know this requires getting comfortable with the IRS website, and we're happy to walk you through the process if you'd like our help. Just ask during your appointment or give us a call.

What's New for Your 2025 Tax Return

Congress passed several new tax breaks this year. Here's what you need to know:

Senior Tax Deduction

If you're a senior taxpayer, you may qualify for an additional deduction.

Amount: $6,000 deduction per qualifying taxpayer
Available through: 2028 (temporary provision)
Who qualifies: Senior taxpayers (specific age requirements apply)
How it works: This reduces your taxable income by $6,000

We'll help you determine if you qualify when we prepare your return. Read more here

"No Tax on Tips" (Tips Deduction)

Workers who receive tips can now partialy deduct them from their income. Despite the "no tax" name, this is actually a deduction, not a complete exclusion.

Maximum deduction: Up to $25,000
Who qualifies: Workers in specific job categories (servers, bartenders, hairstylists, and other tipped positions)
Available even if you don't itemize: You don't need to list out all your deductions to claim this
Years available: 2025 through 2028

The challenge: Most employers didn't track qualifying tips separately all year because this is brand new. We'll work with you to calculate the correct amount based on your records. Read more here

"No Tax on Overtime" (Overtime Deduction)

If you worked overtime in 2025, you may be able to deduct some of that pay.

Maximum deduction:
- $12,500 for single filers
- $25,000 for married filing jointly
- Not available for married filing separately
Who qualifies: Employees who earned overtime pay
Available even if you don't itemize: This is above-the-line deduction
Years available: 2025 through 2028

The challenge: Like tips, overtime wasn't tracked separately by most employers. We'll help you determine the correct amount. Read more here

Trump Accounts

A new type of savings account was created to help families start saving for their children early.

Who qualifies: Children born between 2025 and 2028
Special credit: Eligible children are treated as making a $1,000 payment against tax liability (through a pilot program)
Annual contributions: Up to $5,000 per year can be added to the account
Tax benefits: Similar structure to other education savings accounts
Flexibility: Can be rolled over to ABLE accounts in certain circumstances

If you had a baby in 2025 or are expecting one, we can discuss whether this account makes sense for your family.

Other Notable Changes

Standard Deduction increased: Higher amounts for all filing statuses
- Single: $15,750
- Married filing jointly: $31,500
- Head of household: $23,625
Child Tax Credit increased: Now $2,200 per qualifying child
SALT deduction extended: State and local tax deduction limit increased to $40,000 (with phase-out based on income)
529 accounts enhanced: K-12 expenses increased from $10,000 to $20,000 per year

Why This Year Will Be Different

Heads up: Tax season 2025 may be more complicated than usual.

The tips and overtime deductions are completely new. Here's what that means:

Employers weren't tracking this information - They didn't know they'd need to separate tips and overtime from regular wages
Reporting isn't required - Employers are encouraged to provide statements, but they don't have to
You may need to gather records - We might need pay stubs, time sheets, or other documentation
Calculations will take time - We'll need to carefully determine the correct amounts based on IRS guidance

What we'll do: We'll work with whatever information you have. Be prepared to provide your last pay stub, W-2s, and any statements from your employer. We'll figure out the rest together.

Get Your Refund Faster with Direct Deposit

The IRS is moving away from paper checks. Here's what you need to know:

Paper checks are slow: Expect to wait at least 6 weeks to receive a check in the mail
Direct deposit is much faster: Most refunds arrive in 1-3 weeks
Other electronic options available: We can discuss alternatives during your appointment
More secure: No risk of lost or stolen checks

We'll talk about the best refund option for you when we prepare your return. We want to make sure you get your money as quickly and safely as possible.

Save Time with Our Client Portal

If you've used our secure client portal in the past, you can upload your tax documents there to save time. We'll be sending a separate email with instructions on how to log in and upload your documents.

Benefits of using the portal:

Upload documents anytime, day or night
Secure and encrypted
Faster processing of your return
No need to mail or drop off paperwork

More Tax Law Details

The information above addressed the items that will affect many of our clients. We also have created some additional items on a second page. These affect business ownership, gig workers and family issues.

Check it out now