January 2025 Tax Tips

Happy New 2025, the year of the Tax Super Bowl!

Or maybe another possible Taxmageddon. Both nicknames have been offered to describe what could happen in 2025 if Congress doesn't act to extend all the Tax Cuts and Jobs Act (TCJA) of 2017 provisions, mostly affecting individuals, that are set to expire this Dec. 31.

The Super Bowl of Tax would be more fun, both from watching the process unfold (if you're a tax geek) and, depending on what happens to the tax breaks, the final decisions on the expiring TCJA laws.

Taxmageddon, on the other hand, could leave millions of taxpayers, their advisers, and the Internal Revenue Service in a big, messy lurch. Tax planning would be delayed. Filings more frustrating than usual. And the costs to everyone, emotional and financial, could be off the scale.

So, I'm 🤞🤞🤞 for the Tax Super Bowl, not Taxmaggedon, route.

Until Capitol Hill lawmakers decide which path they'll take, and even after, we still need to think about some tax tasks. This first month of the year, that mostly means filing last year's tax returns. And since there weren't any huge tax law changes in 2024, we should be in pretty good shape.

Still not necessarily daily: But it never hurts to have some help and/or reminders regarding filing your Form 1040. That's where January's tax tips come into play.

As has been the case for the last few years, the tax tips again will appear first in the upper right corner of the ol' blog's homepage (and other pages you click on), just beneath the old-school yellow No. 2 pencil tip image. The highlighted tips then will be added to the monthly tax tip pages.

There's no firm posting schedule, but I'm aiming for at least one tip a week. During high filing season of January through Tax Day on April 15, I'll likely post more frequent tips.

Year-round tip time: While most of the tax advice tidbits through Tax Day will focus on completing and filing our 2024 returns on time, we all know that taxes are a perpetual motion machine.

Some people file their tax returns in January. Others aim for the mid-April due date. Some — OK, millions of procrastinators — push their filing back to October by getting an extension. (Here's an early, unofficial January tax tip: the extension is to file the forms, not an extension to pay any tax you owe.)

On top of that, we're already in a new tax year, meaning our 2025 tax liability is now accruing.

Then Mother Nature sometimes throws destructive fits, with major disasters affecting and delaying tax tasks for those in the paths of tornados, flooding, hurricanes, blizzards, and more types of natural catastrophes.

And, of course, there's unforeseen circumstances, like a global health crisis and pandemic. Let's hope that doesn't happen again, in 2025 — I'm looking at you, bird flu! — or ever, but….

That's why you'll get a mix of traditional filing tips, alerts about changes, and future tax planning.

Since you're reading this, you know the January 2025 page is live. You're also probably raring to get started on your taxes. Me, too. OK, not so much raring for me, but I'm with you go-getters in spirit!

So with our hopes high for a good 2025 tax-filing season, let's get this New year's tax tips party started!

Odometer readings and ways to deduct business miles — Yes, attentive blog readers. This was the last tip of December 2024. But if you use your car for business and didn't note the vehicle's total mileage after you finished making work visits, then do so today. Or as least as soon as you get in the vehicle and head to your first business trips of 2025. That year-ending and/or year-starting odometer reading, along with tracking all your work-related miles and how you claim them, could make a significant tax difference at filing time. (Jan. 1, 2025)
A Happy New Tax Year look at 2025’s tax brackets — It’s brand spanking new year! Arriving along with 2025 were inflation adjustments to many federal tax provisions, notably the income amounts that fall this year into our seven tax brackets. While the Internal Revenue Service announced these 2025 changes last October, January is the month when the actual tax years collide; we're filing 2024 returns while also making moves to reduce our coming 2025 tax liability. So a look at the 2025 tax brackets is a good way to get the new tax year started. At the end of that tax brackets post, which is the first of the ol' blog's 10-part annual inflation series, you'll find a directory to the nine other tax areas affected in this year by inflation. Expect to see more on those other nine posts as separate tax tips through this filing season and tax year. (Jan. 1, 2025)
Tax-favored workplace retirement account changes can help you save more in 2025 — Workplace retirement plans, the most commonly known type being 401(k)s, can help you save for your post-work years. But you need to make the most of them. Contribute enough to at least meet your employer’s match. And if you’re in your early 60s, this year you can be a super saver thanks to a special SECURE 2.0 catch-up amount. (Jan. 2, 2025)
A million who missed COVID stimulus payments in 2021 are getting the money now — Last month, Uncle Sam discovered that 1 million people who qualified for economic impact payments (EIPs) in 2021 didn’t claim the money. So now the Internal Revenue Service this month is automatically sending them the belated COVID stimulus cash, which could be as much as $1,400 per person. If you’re one of the eligible recipients, keep an eye this month on your bank account for direct deposit, or your snail mail box if the IRS doesn’t have your financial institution data. (Jan. 3, 2025)
Business tax filing season kicks off Jan. 15 — The Internal Revenue Service has announced a start to the 2025 tax season, but just for business filers. On Monday, Jan. 15, the IRS says it will accept e-filed business returns. The official start date for processing individual tax returns this year officially is, for now, "coming soon." (Jan. 4, 2024)
Deadlines for disaster-delayed 2023 returns are nearing: Feb. 3 and May 1 — The major winter storm sweeping across much of the middle of the United States is a reminder that every season has its hazards. Some were disastrous in 2024, meaning taxpayers got filing relief from the IRS. Now, affected taxpayers in 24 states and 2 territories are facing imminent disaster-delayed 2023 filing deadlines, with most due by Feb. 3, and the others by May 1. (Jan. 5, 2025)
6 tax moves to make in January 2025 — Happy New Tax Year! To make sure 2025 gets off to a good tax start, here are six tax moves to make this January. (Jan. 6, 2025)
Mark these key federal tax dates on your 2025 calendar — It’s not official yet, but the IRS dropped a big hint this week that the 2025 tax-filing season will officially start on Monday, Jan. 27. That date appeared in the agency’s announcement that Free File opens on Jan. 10. In addition to those two important filing dates, we also already know some other important tax dates. Here’s a look at the key tax deadlines in January through December 2025 that many of us must meet. (Jan. 8, 2025)
EITC, scam victims, and estimated tax deadlines on NTA’s list of legislative suggestions — The National Taxpayer Advocate (NTA) issues a report every year to Congress, as well as legislative recommendations that federal lawmakers should consider. Among NTA Erin M. Collin’s 69 suggested law changes are providing tax relief for scam victims, splitting the EITC into two easier-to-claim credits, and making estimated tax deadlines truly quarterly. (Jan. 9, 2025)
Free File 2025 is open! — Free File 2025 is open as of Jan. 10. If your adjusted gross income, regardless of your filing status, is $84,000 or less, you should be able to find a tax software that fits your needs. This year, the eight tax software companies that were part of the no-cost tax preparation and e-filing program last year are back. (Jan. 10, 2025)
2025 tax season, including expanded Direct File in 25 states, starts Jan. 27 — The start of Tax Season 2025 is official. The Internal Revenue Service will start processing 2024 tax year returns on Monday, Jan. 27. That’s also the day the expanded, both in number of states and tax options, the IRS-operated free online Direct File program will open to eligible taxpayers in 25 states. And if you’re eligible to use Free File — adjusted gross income of $84,000 or less — that no-cost option is already operational. (Jan. 11, 2025)
Tax statements you need to file your return — You’re ready to file your Form 1040, but to do so completely and accurately, you need other documents. Here's a look at the myriad tax statements that you’ll need. They have specifics on last year's income, along with other tax-relevant filing data. You should get most, but not all, by Jan. 31. (Jan. 13, 2025)
Final 2024 estimated tax payment due Jan. 15 — Jan. 15, is another Tax Day for millions of us who pay estimated taxes. It's the deadline for the final estimated tax payment for the 2024 tax year on income not subject to withholding. (Jan. 14, 2025)
What’s new on your 2024 tax return — Even when there aren't any major tax law changes (thank you, Capitol Hill, for giving us a break!), we taxpayers are still likely to encounter some changes when we start working on our returns. Here are some highlights of what you might find as you file your taxes this year. (Jan. 15, 2025)
Do you have to file a tax return? Probably — Not much is out of the Internal Revenue Service's reach, which is why most of us must file a Form 1040. But in some cases, Uncle Sam lets folks off the tax-filing hook. Here's a look at the factors that go into determining whether you must file a tax return. (Jan. 16, 2025)
Tax-free income for short-term home rentals — A big event in your hometown could net you some tax-free cash. If you rent your home for no more than 14 days a year — for example, to folks coming in for a music festival or major sporting event or a presidential inauguration — those lodging payments are not taxable at the federal level. (Jan. 17, 2025)
GOP’s myriad tax proposals to consider in 2025 — On Jan. 20, Republicans again will have full control of Washington, D.C. The GOP already is looking at ways to extend the party’s signature tax reform measure of 2017, as well as incorporate some of Donald J. Trump’s campaign promises. The House Budget Committee has collected more than 200 ideas in a 50-page working document that’s catching heat from Democrats who say it targets too many vital services. (Jan. 19, 2025)
Gambling winnings are taxable income — If you’re betting on the college football championship game between Notre Dame and Ohio State, keep track of your winnings (and losses). Wagers that pay off are taxable income that must be reported next year on your 2025 tax return. But you can use your gambling losses, from this NCAA game and other bets this year, to reduce your taxable amount. (Jan. 20, 2025)
Questions to ask, and answer, before you tackle your 1040 — You’ve got all your tax statements, but don’t file just yet. You also need to ask yourself some basic tax questions. Your answers could help you submit a tax return that’s as complete and correct as possible. They also could mean you don’t overlook any tax breaks. (Jan. 21, 2025)
Working from home and the home office deduction limitations — The second Trump Administration is trying to cut the federal workforce by forcing employees who work from home (WFH) back to their offices. It might succeed if those on Uncle Sam's payroll agree with the 46% of private sector workers who said in a recent survey that they would quit rather than go back into the office 40 hours a week. Plus, a look at who can claim the home office tax deduction. Hint, not WFH employees. (Jan. 22, 2025)
Disaster-delayed 2023 tax deadline is Feb. 3, 2025 — Millions of Americans are dealing with disasters early this year, and federal officials, including the Internal Revenue Service, have responded to provide relief. But some disasters from 2024 also are affecting taxpayers this year. Certain filers in 14 states and 2 territories are facing a Feb. 3 deadline to file their disaster-delayed 2023 tax returns. (Jan. 23, 2025)
Real estate taxes due on damaged, destroyed property — The timing of a natural disaster could mean you owe property taxes on a piece of real estate that’s been seriously damaged or destroyed. Unfortunately, in many cases there’s not much immediate relief for the already devastated owners, since the appraisals for tax purposes were done before the disaster. (Jan. 24, 2025)

*****

As I mentioned earlier on this first-of-2025 tax tips page, taxes and their associated tasks happen year-round. So as soon as January wraps and all this month's tips are listed here, I'll move on to the separate February through December pages.

You can, however, already find links at the bottom of every monthly tax tips page that will take you to each page's collection of tax advice. That's them below.

Technically, all are live, meaning you can click now on the February through December links below. But since we're not there yet, instead of tax tips you'll be greeted by an animated fellow making good use of one of my favorite Texas sayings, "Whoa up there, cowboy."

OK, he doesn't look like a cowboy. And I'm not sure exactly what he's saying. I'm the one who typed those words preceding the GIF image. But you get the idea.

That idiomatic admonishment will be replaced by usable tax information as the year's months arrive. I appreciate your wanting more tax tips, and your patience on waiting for them to be posted.

January	July
February	August
March	September
April	October
May	November
June	December

Today's Tax Tip

Questions to ask, and answer, before you tackle your 1040 — You’ve got all your tax statements, but don’t file just yet. You also need to ask yourself some basic tax questions. Your answers could help you submit a tax return that’s as complete and correct as possible. They also could mean you don’t overlook any tax breaks. (Jan. 21, 2025)
The 2025 Tax Tips offer ways to file your annual return, along with post-filing advice, important tax news and, of course, ways to cut your current tax year bill. You'll find the monthly assemblages on their own respective pages: January, February, March, April, May, June, July, August, September, October, November and December. Remember, tax tasks and tips don't stop after you file your annual return!

All About Kay

OK, some about Kay

Kay Bell — Native Texan
(the blog title totally makes sense now, right?). Professional journalist. Tax geek.
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Tax Year 2025 Countdown

Happy New Tax Year! Are you ready to file your 2024 tax return? I know, too early to ask. But Tax Day 2025 will be here before we realize it. The Internal Revenue Service deadline to file and pay any tax we owe is the regular April 15 date this year. It’s also Tax Day for most of the states that collect income taxes from their residents, which is most of the states! If that seems too far away right now, don’t worry. As is the case every tax season, the ol' blog’s monthly tips and reminders a little farther down this column should help all of us meet our state and federal responsibilities. Procrastinators also will want to keep an eye on the countdown clock just below. It tracks how much time we have until April's Tax Day, just in case we put off our annual tax task until the absolutely final hours and decide we need to instead get an extension request into the Internal Revenue Service by that date.
Note: I'm in the Central Time Zone, so adjust accordingly for where you live.

Time for Tax Tasks

🎆 Happy 🎉 New 🥂 Year! 🎆

Hello 2025! Last year was challenging, and I’m sure you’ll find plenty of new ways to test us over the next 12 months, but we’re ready for it. We hope!

via GIPHY

At least we know it will be exciting on the tax front, with the Tax Cuts and Jobs Act’s individual tax provisions set to expire on Dec. 31. Congress will have its hands full either extending or revising the tax provisions. But don’t worry. The ol’ tax blog will be here throughout 2025, watching that process and keeping tabs on all the New Year’s tax-saving potential. So, let's get to it now, with the January tax moves below.
Jan. 1: Once more for the official monthly tax moves — Happy New Year! Some people are champing at the bit to get their taxes filed, mainly because they are expecting an Internal Revenue Service refund. But remember, you need to get all your tax documentation before you can accurately complete your Form 1040. And even if you send the form(s) early, the IRS won’t start processing them until later this month. So, take a deep breath. We’ve a ways to go yet.

Jan. 6: It's the first official work week of 2025, with folks who took long holiday breaks finally returning to the office. Once you get settled at your desk, you might want to take some time for a couple of tax-related tasks that could pay off, this year and after you’re done with the 9-to-5.

First, check your paycheck withholding and, if necessary, adjust it. That might be necessary if you’ve experienced a major life change.

Second, if your workplace has a 401(k) plan and you’re not using it, sign up as soon as possible. Then contribute as much as you can. This will give your retirement account more time to grow tax-deferred if it’s a traditional 401(k) or tax-free if it is a Roth version.

Jan. 10: Is your adjusted gross income (AGI) $84,000 or less, regardless of your filing status? Then you qualify to use Free File, which became available today. The same eight software companies that participated last year are back for the 2025 filing season.

If your income is too high, you still can file for free by using Free File's Fillable Forms option. That will be available on Jan. 27 when the full 2025 tax season kicks off and the IRS starts processing all returns that were filed before then and that have been in a holding pattern.

Jan. 10: Do you work as a server at a restaurant or at any other establishment where gratuities from customers are part of your compensation? I hope you get all the tips you deserve for doing your job well. Remember, though, that those tips are taxable income.

Whether you're dining at your favorite eatery or getting food delivered to your home, if a tip isn't included on your restaurant or delivery bill, click the image above to calculate how much to tip the person who brought it to you.

And if you got at least $20 in gratuities in December for your extraordinary services as a food server or hair stylist or parking valet or whatever job where tipping is common, you must report that amount by today. Use Form 4070 to let your employer know the total tips you took in last month.

Jan. 15: Today is the due date for the final estimated tax tax payment for the 2024 tax year. This payment covers the earnings you got last October, November, and December that weren’t subject to withholding. You can pay your estimated amount electronically, or mail your check payment and voucher 1040-ES to the IRS in an envelope postmarked today.

Jan. 20: Today is Martin Luther King Jr. Day. Every year on this federal holiday, millions of people commit to a day of service.

Click image to find out ways
you can volunteer on MLK Day.
Taking time on the Rev. Dr. King's holiday to volunteer at a nonprofit isn't tax deductible, but some costs associated with volunteering could help reduce your tax bill if you itemize.

Jan. 20: Tonight also is title time. The 2025 NCAA College Football champion will be crowned this evening in Atlanta. It’s taken a while to get here. The championship playoff bowl games system was extended, with qualifying matchups starting on Dec. 21, 2024. It's been a fun run for college football fans and for those who bet on the games thanks to the Supreme Court's 2018 ruling that allowed states to accept legal sports wagers, including on college competitions. If you're one of those gamblers and your game picks pay off, remember that you'll owe taxes on your winnings when you file your 2025 return next year.

Jan. 27: Tax Season 2025 officially starts. That includes processing of tax returns filed earlier, whether via commercial software, tax preparers, IRS Free File, or IRS Direct File, the IRS’ own free online tax prep and e-filing program. In addition to more than double the Direct File participating states from last year, the IRS operated site will offer more options that apply to more taxpayers’ situations.

Jan. 31: Wow! The first month of 2025 is over? So soon? Time really does fly when you're having tax fun. We'll keep it going here in this new year with new Tax Moves to Make each month, which you also can find on their monthly tax tips pages. January’s tips page is already is filling up!

Small Business Tax Calendar: Important filing, deposit and record keeping dates throughout the year that your company needs to know. The IRS is updating the online version. Until that link is operational, you can get the full year's important business and individual tax dates in IRS Pub. 509.

State Tax Help

Don't forget your state taxes!
Forty-two states and D.C. collect personal income taxes. But even if you live in of the eight states without any income levy, you still face other state (and local) taxes.

State Tax Departments provides links to your state's Web page. The companion page, Tax Tidbits, is the compilation of blurbs about each state's tax laws. And for more state tax news, check out all our state tax bloggings.

Tax Forms

Thanks to our increased use of tax preparers and computer software, many of us don't see our tax forms until we sign and file them. But knowing what's on these documents, either in paper or digital form, and why the IRS wants it is key to understanding our tax system. And knowledge definitely is power, especially when it comes to tax savings. Find this valuable information in the ol' blog's special Tax Forms 2025 page.

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You also might enjoy these other tax tips from some of my tax-writing colleagues:
J.K. Lasser 2025 Taxes
Tax Savvy for Small Business 2025

Taxes, Accounting, and Bookkeeping
3-in-1 Bible 2025

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I gotta tell ya ...

AKA Disclaimer:

I am a professional journalist who has been covering tax issues since 1999. I am not a professional tax preparer.

The content on Don't Mess With Taxes is my personal interpretation and opinion based on my study and understanding of tax laws, policies, and regulations. It is provided for your private, noncommercial, educational, and informational purposes only. While I work to ensure each post's accuracy, the items are not recommendations of any specific tax action(s) you should or should not take. Similarly, mentions of commercial tax products or services are not endorsements.

In other words, my ramblings on the ol' tax blog are free advice, and you know what they say about getting what you pay for. That's why when it is time for you to file your own taxes, I urge you to get additional, professional, paid-for guidance from an accountant, Enrolled Agent, or other reputable, qualified tax preparer who is familiar with your individual tax circumstances.

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COVID-19 & Taxes

Coronavirus has wreaked havoc
on the 2020 and 2021 tax seasons.
These five Coronavirus (COVID-19) and Taxes pages have details:
March-July 2020
August-December 2020
January-December 2021
January-December 2022
…and so it continues into 2023
…and, alas, into 2024
It is 2025 and, yes, it's still an issue
You can find medical coronavirus resource links in the next section.

COVID-19 Resources

Need help finding a coronavirus vaccine in the United States?
Call 1-800-232-0233
or TTY 1-888-720-7489.
More information and resources at:
CDC Vaccines
CDC Booster Shots
HHS Combat COVID
USA.Gov COVID Info

January 2025

..................................................

Photo by Szabo Viktor on Unsplash

Tell it to the Hill

While it's easy to rail at the IRS, for the most part we can thank — or blame — Congress and the White House for our tax laws. So if you have an issue with tax legislation or want a tax bill passed, you need to let your federal legislators and the White House occupant know of your concerns. You can find out who in Washington, D.C., to contact (and how), as well as get information on your local lawmakers for matters, tax or otherwise, closer to home, at USA Gov.

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