Tax Season 2025 Is Here: Seven IRS Changes to Know Before You File

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published 26 January 2025

Tax season officially starts Monday, January 27th, when the IRS accepts tax returns.

Whether you plan to file your tax return early or like to wait a while before filing, reviewing key tax changes that may affect your tax bill is essential.

So, here are seven of them to know before you file your 2024 taxes.

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IRS tax changes for 2024 returns

Tax provisions can change yearly, and the reasons for these vary.

This year, changes for the 2024 tax year (returns you’re filing now in 2025) are a combination of IRS inflation adjustments and other rule changes that could impact your return.

Also, A lot is happening at the IRS this tax season. A new presidential administration has begun, the former Commissioner has stepped down, an indefinite hiring freeze is in place, and an idea for another tax agency, the “ERS,” is floating around. (More on all that later.)

Here’s more of what you need to know.

#1. 2024 child tax credit amount?

For the 2024 tax year, the maximum child tax credit (CTC) remains $2,000 per qualifying child under 17, but the refundable portion has increased from $1,600 last year to $1,700 for this filing season.

Families with lower tax liabilities can receive up to $1,700 back as a refund, even if they owe no taxes.

Important details:

Credit phases out for single filers at $200,000 and joint filers at $400,000
Children must be under 17, be your dependent, and meet citizenship requirements
No advance monthly payments will be issued
The credit is partially refundable, reducing your tax bill and potentially providing a refund

For more information, see Child Tax Credit: How Much Is It for 2024 and 2025?

You may remember hearing last year that Congress was considering tax legislation that included a revised child tax credit. Unfortunately, that legislation stalled. So, at the moment, no pending legislative changes would expand the credit for the 2024 tax year.

However, the new Congress could consider potential child tax credit enhancements as part of a larger tax bill later this year that could impact the 2025 tax year (returns typically filed in 2026). Without congressional action, families face a potential cliff after 2025, when the credit could drop from $2,000 to $1,000 per child. So, stay tuned.

#2. IRS 1099-K threshold 2024

The IRS has repeatedly changed the so-called “$600 rule” for 1099-K reporting. That rule says millions of people who paid at least $600 for goods and services through a third-party network (think PayPal, Square, Venmo, Stripe, Cash App, etc.) could receive a Form 1099-K. (Those usually arrive late this month or early February).

But for now, a different reporting threshold applies for 2024 federal tax returns.

As a result, payment processing platforms are reporting more transactions than ever this tax season. The 1099-K threshold has dropped from $20,000 and 200 transactions to just $5,000, and there is no minimum number of transactions, meaning more people will receive a 2024 1099-K in the coming days or weeks.

The form could come from any provider that paid you through an online platform, including Etsy, StubHub, eBay, etc. If you receive a 1099-K, make sure it matches the information in your records. If there are problems with your form, contact the third-party payment network that sent it.

This reporting shift is part of the IRS's gradual implementation of new reporting rules initially outlined in the American Rescue Plan Act.
The current $5,000 threshold is a transitional step.
Plans are to further reduce it to $2,500 in 2025 and potentially $600 in 2026.

However, the future of this provision could be a bit uncertain with the new Republican-led Congress and White House.

And remember, whether you receive a 1099-K or not, the IRS expects you to report all taxable income on your federal income tax return.

#3. Free File taxes

IRS Free File allows those with income within a specific limit to file their federal income tax returns for free. The program connects taxpayers with the agency’s trusted tax prep partners, which differs from the new Direct File program (mentioned below).

You can use Free File this year if your adjusted gross income (AGI) is $84,000 or less. That’s a $5,000 increase over last year’s income limit for the service.

The IRS Free File program operates with tax preparation providers and has various eligibility rules and products. It has been open since January 10.

If you haven’t filed your taxes yet and are interested in IRS Free File, you can visit the IRS Free File site. Follow the online lookup tool prompts to find the right product for you.

Also, for more information, see IRS Free File is Open: Are Your Taxes Eligible?

#4 Tax brackets 2024

As you likely know, federal income tax rates are tied to tax brackets that change yearly for inflation. That means you could fall into a higher or lower tax bracket each year based on your income and pay a different tax rate from one year to another.

With that in mind and the start of tax season officially open, it’s good to know which bracket you fall into if you don’t already. The good news is tax brackets are more favorable this year than last due to inflation adjustments.

To learn more about what that means for you and your tax bill, see Kiplinger’s guide to the federal tax brackets and income tax rates for 2024 and 2025.

#5. 2024 standard deduction

When preparing your federal income tax return, deciding whether to take the standard deduction or itemize your deductions is important.

The standard deduction is a fixed dollar amount that reduces your taxable income, whereas itemized deductions can also lower your taxable income; the amount varies and is not predetermined. Most taxpayers claim the standard deduction.

With tax season starting, it's good to know the standard deduction amounts, which, due to adjustments for inflation, are higher than last tax year if you haven't already.

To learn more, see Kiplnger’s guide to the standard deduction for 2024 and 2025.

Also, if you are age 65 or older, you can take advantage of the extra standard deduction.

#6. Direct File expanded

Last year, the IRS launched a pilot program called Direct File, its in-house tax preparation and filing system. The pilot enabled eligible taxpayers from a dozen states to file federal returns directly with the IRS at no cost. This year, the program has doubled its reach and is available in 25 states for relatively straightforward federal tax returns this filing season.

The IRS estimates that 30 million people could be eligible to participate in Direct File, saving them time and money when filing their returns.

Would you want to file your taxes directly with the IRS? Discover which states won't have the Direct File program this year.

#7. Extended tax deadlines

In 2024, the United States experienced a series of devastating natural disasters, resulting in significant loss of life and property.

For example, Hurricane Helene, a Category 4 hurricane, caused hundreds of fatalities and inflicted approximately $80 billion in damages, making it one of the costliest hurricanes in U.S. history. Helene also brought catastrophic flooding and historic rainfall to parts of North Carolina, surpassing previous flood records and leading to widespread destruction across multiple states.

California is facing severe challenges with wildfires, most recently in Los Angeles. These wildfires were part of a broader trend of extreme weather events nationwide, reportedly with over twenty-five disasters costing over $1 billion each.

The IRS has issued numerous tax deadline extensions for affected areas in response to these devastating situations. These deadlines allow taxpayers more time to file their returns, sometimes much later in 2025, without penalties.

IRS tax deadline extensions for disaster areas can be helpful by:

Providing breathing room to recover essential tax documents that may have been lost or damaged
Allowing additional time to manage tax obligations while dealing with potential property damage, displacement, or personal hardship
Potentially preventing additional financial strain during an already challenging recovery period

For more information, Kiplinger has a running list of states with tax deadline extensions this year. However, the IRS disaster relief page has the most official, up-to-date information.

Tax season bottom line: When are taxes due?

Speaking of deadlines: This year, the tax filing deadline to submit 2024 tax returns or to submit an extension to file and pay taxes you owe for 2024 ("Tax Day") is Tuesday, April 15, 2025.

If you have a valid filing extension, those returns aren’t due until Oct. 15, 2025. (As mentioned, the IRS has and will continue to offer tax deadline extensions to those in areas impacted by federally declared natural disasters.)

If you are an early filer, be sure you have all the information you need before you file. You are responsible for filing a complete and accurate tax return, so gather your records and tax forms and double-check your taxpayer identification number and PIN.

The IRS emphasizes that the quickest way to obtain information about your tax refund and find answers to common tax questions is to visit the IRS.gov website. Additionally, if you are due a tax refund, direct deposit is the fastest way to receive it.

And...there’s another key change to know before you file this year.

Honorable mention: Trump IRS plans

Since Donald Trump began his second term as president on January 20, 2025, the IRS has undergone significant changes that could significantly impact tax administration.

Key leadership positions, including the IRS Commissioner and Chief Counsel, have been vacated, with Trump nominating former Rep. Billy Long as Commissioner.
Executive orders have mandated federal employees to return to office full-time, implemented a federal hiring freeze, and reinstated "Schedule F" to reclassify certain federal workers.
The IRS faces substantial budget cuts and operational challenges, including a $20 billion reduction in special funding and a halt to hiring new agents.

These changes signal a major shift in IRS operations and priorities, potentially impacting ongoing modernization efforts and tax enforcement strategies under the new administration. (As Kiplinger has reported, a proposed “external revenue service” could focus on tariffs.) And it’s all happening as tax season begins.

Stay informed and consult a tax professional if you have concerns about how tax changes will impact your return.

As the senior tax editor at Kiplinger.com, Kelley R. Taylor simplifies federal and state tax information, news, and developments to help empower readers. Kelley has over two decades of experience advising on and covering education, law, finance, and tax as a corporate attorney and business journalist.