Preparing for Tax Season: New Updates and Filing Options

With recent tax law changes, you may want to stay informed as you prepare to file your 2025 tax return. Below, you'll find explanations of some of the most common tax topics.

When are taxes due?

Federal tax deadlines vary depending on how you earn income. Here are the key dates to know each year:

• April 15: Deadline to file your federal tax return or request a filing extension. If you owe taxes, payment is still due by this date even if you file an extension.
• October 15: Deadline to file your tax return if you requested an extension by April 15. An extension gives you more time to file, not more time to pay.
• Self-employed estimated tax deadlines: Self-employed individuals generally must pay estimated taxes quarterly — April 15 (income earned January through March), June 15 (April through May), September 15 (June through August) and January 15 of the following year (September through December).

What documents do I need to file taxes?

At the start of the new year, you'll begin to receive various forms from your employer, financial institutions and clients if you're self-employed. Keep these documents in a safe place, either as hard copies or digitally, so you can easily access them when filing.

Essential documents include:

• W-2: Earnings for the year and the amount withheld for taxes
• Form 1098-E: Interest paid on any student loans
• Form 5498: Contributions made to an Individual Retirement Account (IRA)
• Form 1098: Amount of interest and related expenses paid on your mortgage
• Form 1099: Income received from self-employment earnings, interest and dividends, government payments and more
• Form 1095: Health insurance coverage forms
• SSA-1099: Any Social Security benefits you received

If you plan to itemize your tax deductions instead of taking the standard deduction, you'll need:

• Charitable donation receipts
• Property tax receipts
• Last year's state refund amount

Along with gathering the documents you need to file your tax return, confirm your personal details, such as your current address, Social Security number and your bank account information so you can pay if you owe taxes or for direct deposit of your refund.

Hang on to paper or digital copies of any tax forms and documents you receive for at least three years.

What are my options for filing taxes?

When it comes to filing taxes, you have several approaches depending on your comfort level and complexity of your return:

• DIY tax software: File your taxes yourself using paid platforms or IRS Free File if your adjusted gross income is $84,000 or less.
• Tax professionals: Certified public accountants or tax preparation companies can handle your filing, provide audit support and offer guidance.
• Consultation recommended: Consumers should always consult with a tax professional to ensure accurate filing and compliance with current tax rules.

What changes to tax laws do I need to know about?

Tax laws change regularly. You can stay up to date by visiting the IRS website. Recent changes to tax laws include:

• Income tax on tips
• Clean energy credits
• The Child Tax Credit
• Federal income tax brackets
• Paper checks for refunds

What tax bracket am I in?

Your federal tax bracket depends on your taxable income as well as your filing status — whether you're filing as a single taxpayer, married filing separately or as a married couple filing jointly. Tax brackets determine the rate at which your income is taxed, but you're only taxed at that rate on the portion of your income within that bracket, not on your entire income.

For example, if your adjusted gross income (AGI) is $100,000 and you are filing as a single taxpayer:

• The first portion of your income is taxed at 10%.
• The next portion falls into the 12% bracket.
• The remaining income up to $100,000 is taxed at 22%.

Knowing which bracket applies to you can help you better understand your potential tax bill and plan ahead for filing season. Check with the IRS to find your tax bracket for the current tax filing year.

What are tax credits and deductions?

Deductions can reduce the amount of your taxable income, while tax credits can reduce the amount of tax you owe. Deductions typically affect a tax return only if the total of itemized deductions exceeds the standard deduction, so many taxpayers do not itemize deductions.

Possible tax deductions include:

• Mortgage interest paid
• Property tax payments
• Contributions to a traditional IRA
• Student loan interest paid
• Tuition and fees for education

Possible tax credits include:

• Earned Income Tax Credit (EITC) for people with low-to-moderate incomes
• Child Tax Credit (CTC) for qualifying children
• American Opportunity Tax Credit (AOTC) for qualified higher education expenses
• Lifetime Learning Credit (LLC) for qualified tuition and regular expenses

How can I avoid tax scams and fraud?

Scammers tend to take advantage of opportunities during tax season, so it's important to remain vigilant and aware of potential scams and signs of fraud. Be wary of any individual or company that promises you a large tax refund or charges a hefty upfront fee.

To protect your identity, create an account directly with the IRS and get an Identity Protection PIN, a six-digit number that you use when submitting a return. It's connected to your Social Security number and prevents another person from filing a return with your information if they don't have your PIN.

If you decide to work with a tax preparer, make sure they have a Preparer Tax Identification Number (PTIN), which ensures they are compliant with current regulations.

How long does it take to receive a tax refund?

If you're receiving a tax refund, the sooner you file, the sooner you'll receive it. The IRS typically processes e-filed returns in less than 21 days. Returns filed by mail may take six weeks or more to process. If your return requires corrections or additional review, the process time may be even longer. Visit the IRS's website to check the status of your refund.

What could I do with my tax refund?

If you're receiving a tax refund, it could help you move closer to achieving your financial goals. If you're feeling stumped on the best way to use your refund, you can explore several options and determine the best course based on your personal goals:

• Pay down some (or all) of your debt
• Save or invest for a future goal, such as a down payment or your children's education.
• Make an extra contribution to a retirement or investment account
• Make a large purchase, such as a car or home renovation

If you decide to make a significant purchase, make sure it aligns with your goals and won't disrupt your long-term financial plans.

Get ready for tax season

Taxes are complex, but understanding the basics can help make filing season easier. In the meantime, get refund-ready by opening a Citizens checking account and setting up direct deposit.