As California’s tax filing season officially began on January 7, the IRS will launch its free tax filing services starting January 10. With the 2025 tax season in full swing, the IRS has provided recommendations to help taxpayers prepare effectively.
Use Online IRS Accounts
The IRS encourages taxpayers to utilize online accounts to view essential information from recent filings, access electronic documents, and check payment history. This tool simplifies the filing process and minimizes the risk of data breaches.
Protect Yourself with an IP PIN
To prevent identity theft during tax filing, the IRS offers an IP PIN system. This six-digit number safeguards taxpayers against fraudulent filings using their Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). Starting in 2025, taxpayers with a valid IP PIN can file their returns even if dependents have already been claimed on another return, reducing delays caused by duplicate claims. IP PINs can be easily created on the IRS website.
Quarterly Estimated Tax Payments Due January 15
Self-employed individuals, independent contractors, freelancers, and consultants must submit their fourth-quarter estimated tax payments by January 15. Failure to pay by this deadline could result in a tax liability or reduced refunds when filing returns.
Report Digital Asset Transactions
Taxpayers who engaged in cryptocurrency or NFT transactions must report related income on their tax filings. Proper documentation, including purchase and sale dates and amounts, is essential to ensure accurate reporting.
Report App Sales Income
Taxpayers who sold more than $5,000 worth of items through online marketplaces or apps in 2024 will receive a 1099-K form by January. Even if no 1099-K is issued, all taxable income must be reported. If a taxpayer receives a 1099-K in error, they should organize records and consult the IRS or a tax professional.
Organize Records for 2024
Taxpayers should gather all necessary forms, including W-2s, 1099s (including 1099-K, 1099-INT, and 1099-MISC), and records of digital asset transactions. Accurate documentation minimizes processing delays and refund issues.
Take Advantage of Free Filing Services
Taxpayers with an Adjusted Gross Income (AGI) under $84,000 can file their federal taxes for free. Those with simpler returns may use the IRS’s Direct File pilot program. Additionally, seniors and low-income taxpayers can seek assistance through the Volunteer Income Tax Assistance (VITA) program.
The IRS stresses that accurate filings help taxpayers receive refunds faster. By preparing ahead and double-checking information, taxpayers can avoid delays and errors.
BY WONHEE CHO [cho.wonhee@koreadaily.com]
