Tax Filing Deadlines, Deductions, and Refunds for 2025: The Internal Revenue Service (IRS) officially kicks off the 2025 tax season on January 27, marking a pivotal moment for millions of Americans preparing to file their taxes. This year’s tax filing process brings important changes, including a broadening of the Direct File program and adjustments to tax brackets and deductions that could lead to larger refunds for many. Here’s what you need to know about tax season 2025.
Key Changes for Tax Season 2025
Tax season 2025 is significant for both the IRS and taxpayers, as it reflects the agency’s ongoing efforts to modernize and streamline the tax filing process. The IRS has introduced new tools and features to make filing more efficient, including an expanded version of the Direct File program. This free online tax-filing tool is set to reshape how millions of Americans handle their taxes.
Direct File allows eligible taxpayers to file their returns online, without the need for third-party tax services. The program will be available in 25 states this year, up from 12 in 2024, and is designed to be mobile-friendly, offering accessibility on smartphones, tablets, and computers. In addition, the IRS has introduced a chatbot to guide users through an eligibility checker, making it easier for taxpayers to know whether they qualify for the service.
Direct File: A Game-Changer for Taxpayers
Direct File is a key feature of the IRS’s modernization efforts. With an increasing number of taxpayers preferring to file online, this service offers an intuitive, cost-effective option. In the 2024 filing season, more than 3 million users checked their eligibility for Direct File, and over 140,000 taxpayers used it, surpassing the agency’s goal of 100,000 users. According to the Treasury Department, users of Direct File saved an estimated $5.6 million in tax prep fees.
Direct File will be available in the same 12 states from 2024 (including California, Florida, and Texas), plus 13 new states, such as Alaska, Illinois, and Maryland. This expansion is a critical step in increasing access to tax resources for more Americans. While Direct File is free, taxpayers should be mindful of any eligibility restrictions, particularly in relation to income and tax situations.
Early Refunds and How Taxpayers Use Them
For many Americans, tax refunds are more than just a financial windfall—they represent critical relief. According to a Qualtrics survey, 47% of taxpayers plan to use their refund to pay down debt, and 59% of millennials say the same. Additionally, 34% of Americans anticipate receiving a larger refund in 2025 compared to the previous year. A lower tax burden, due to annual adjustments such as new tax brackets and increased standard deductions, could contribute to these higher refund expectations.
Importantly, a significant portion of taxpayers, including 50% of millennials, depend on their refunds to make ends meet. Given the importance of refunds for many Americans’ financial wellbeing, it’s no surprise that a third of taxpayers are willing to pay a fee to access their refund early.
Tax Filing Deadlines
Tax season 2025 will follow the standard filing deadline of April 15 for most individuals. This is the last day to file your tax return or request a six-month extension. The IRS expects over 140 million individual returns to be filed by this deadline. It’s also important to note that if you owe taxes, they are due by April 15 as well.
The IRS offers the Where’s My Refund? tool, allowing taxpayers to track the status of their refund once their tax return has been filed. For those who file electronically, most refunds are processed within 21 days. For paper returns, however, the IRS advises waiting four weeks for updates.
Stimulus Payments and Recovery Rebate Credits
In addition to regular tax refunds, the IRS is issuing a special round of stimulus payments to about 1 million eligible taxpayers who missed out on the 2021 COVID-19 relief checks. These payments could be as high as $1,400 per individual. If you haven’t yet filed your 2021 tax return, now is the time to do so in order to claim the Recovery Rebate Credit and receive any owed payments. The deadline for filing is also April 15, 2025.
Tips for Filing Taxes in 2025
- Use Direct File if Eligible: It’s free, easy to use, and accessible across multiple devices.
- Consider Early Filing: Filing early helps ensure you receive your refund quickly and gives you more time to address any unexpected tax issues.
- Keep an Eye on Adjustments: Changes to tax brackets, deductions, and credits may result in a lower tax bill or a higher refund for many Americans.
- Stay Organized: Make sure you have all your necessary documents, such as W-2s, 1099s, and proof of deductions, before filing.