Tax Season 2025: What You Should Know Before Filing Your Return
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What is the main topic discussed in this episode?
and how they may affect your finances and portfolio. Listen at schwab.com slash Washington Wise.
When does the 2025 tax filing season begin and who are the hosts?
Here's your Money Briefing for Sunday, February 2nd. I'm Arianna Espuru for The Wall Street Journal. Filing your taxes this year might be a little less aggravating. The IRS has expanded its free filing products and revamped its online services to help filers keep tabs on their returns.
So the IRS launched a pilot last year, something called IRS Direct File. And that's where you actually go onto the IRS website and file your return right there. Last year, it was available in 12 states and now it's expanded to 25 states this year.
What is IRS Direct File and how has it expanded for 2025 filers?
And they say up to 30 million taxpayers would actually be eligible for it.
Today, we're kicking off our two-part series with Wall Street Journal personal finance reporter Ashleya Ebling, breaking down all the changes you'll need to know before filing. That's after the break.
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January 27th marked the first official day that you can file your taxes.
How do IRS Direct File and Free File differ and who qualifies for each?
Wall Street Journal personal finance reporter Ashleya Ebling joins me. Ashleya, tax season kind of crept up on me a bit. Did it creep up on you?
Yeah, I'd say I'm ready for it. But like everyone, the challenge is getting your documents in order.
What are the biggest challenges people encounter when they go to file their taxes?
Well, figuring out where you're filing it is a big challenge. Are you using the same tax software you did before? Are you using the same tax pro you did before? If you have big life changes, that might be the first time you reach out to a tax pro.
What counts as a 'simple' tax return and when does filing get complicated?
There are new ways to file taxes for free. So on average, the IRS says that taxpayers spend 13 hours and $290 preparing and paying taxes. Just for the tax prep.
When should taxpayers consider using tax software versus hiring a tax pro?
So it's worth looking into different options.
So before you file your taxes, it's important to know where you land on the current income tax brackets. How have those changed this year?
So that's something that happens every year. The tax brackets are adjusted for inflation, and that means it takes a little more income to move up into the next higher tax bracket.
How have tax software features (imports, chatbots, pro tiers) changed the user experience?
The software does all that for you, so you don't have to really worry about it. But when you look at that, you might want to make a last-minute retirement account contribution or health savings account contribution because things like that you're allowed to do up to the April 15th deadline, even though it counts for the 2024 tax year, and that could reduce your tax bite. And depending how much your income's raising, you really might not notice the difference.
You mentioned there are ways to file for free, maybe save $290 on a tax return.
How can an IRS online account, IP PINs, and 'Where's My Refund' improve security and tracking?
What's new this year?
So the IRS launched a pilot last year, something called IRS Direct File, and that's where you actually go onto the IRS website and file your return right there. Last year it was available in 12 states, and now it's expanded to 25 states this year, and they say up to 30 million taxpayers would actually be eligible for it.
But the IRS also has Free File. What are the differences between those two programs?
Yeah, it's a little confusing. So direct file, again, is like the actual direct IRS website. Free file, you still should go onto the IRS free file website to start to make sure you're actually in the right place. And then it links you out to eight tax software partners they have. And that's for taxpayers with adjusted gross income of $84,000 or less. And it links you to TaxAct, TaxHawk, TaxSlayer, and then walks you through doing your tax return just as if you're on one of those sites.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:01–0:29
2
When does the 2025 tax filing season begin and who are the hosts?
0:29–1:04
3
What is IRS Direct File and how has it expanded for 2025 filers?
1:04–2:06
4
How do IRS Direct File and Free File differ and who qualifies for each?
2:06–2:39
5
What counts as a 'simple' tax return and when does filing get complicated?
2:39–2:52
6
When should taxpayers consider using tax software versus hiring a tax pro?
2:52–3:10
7
How have tax software features (imports, chatbots, pro tiers) changed the user experience?
3:10–3:39
8
How can an IRS online account, IP PINs, and 'Where's My Refund' improve security and tracking?
3:39–10:53
Speakers
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