The IRS will begin accepting individual returns on Monday, Jan. 27, 2025
More and more taxpayers are leaning towards the convenience and speed of electronic filing (e-file) leading to many of us wanting to know exactly when e-filing starts. The IRS will begin accepting individual returns on Monday, January 27, 2025. Direct File will be available to a limited number of states on January 27th.
When Does E-Filing Start for the IRS?
The exact date can vary slightly every year due to various tax updates and new laws. This year, individual returns will be accepted on Monday, January 27, 2025. For business, e-file opened on January 15th at 6:00 am. Direct Filewill be available to eligible taxpayers in 25 states to file their taxes directly with the IRS which includes 12 states that were part of the IRS pilot last year. Please visit the IRS website to find out more about specific states that are eligible.
Early Preparations: What Can You Do Before E-Filing Opens?
There are several things you can do to prepare for tax season before e-file officially opens:
Gather Your Client’s Tax Documents: Collect all the necessary paperwork you’ll need to help your clients file including:
Receipts for deductions (e.g., medical, educational, charitable donations)
Check for Tax Law Changes: It’s a good idea to review any tax law updates especially since a new administration has been elected—which could impact your filing. The IRS often releases updates regarding new credits, deductions, or changes to filing requirements. Staying informed can help you avoid surprises. We will update our systems and do our best to keep you informed via Taxing Subjects, the Drake Software blog.
Try to stay ahead: Begin preparing your clients’ returns before the e-filing system opens so you are ready to hit the submit button once the IRS officially opens its filing system.
Can you e-file prior year returns?
You can usually e-file the current tax year and the two prior years, except during IRS closing periods. When tax yar 2024 e-filing opens, you can file for 2024, 2023, and 2022. However, if an extension is needed, it can generally only apply to the current tax year.
While waiting for e-filing to open, take the time to gather all the necessary documents, review potential changes in tax laws, and get familiar with your tax preparation software or professional service. By getting an early start, you’ll be ready to file as soon as the IRS begins accepting returns.
Understanding the timeline for e-filing helps you meet your tax filing obligations without stress and can help take advantage of the many benefits that come with submitting your return electronically. So, get ready and prepare to file!
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The IRS has announced a one-day extension for taxpayers with federal tax deadlines originally set for Thursday, January 9, 2025. The new deadline is Friday, January 10, 2025.
This extension comes in response to a Presidential Proclamation issued on December 29, 2024, declaring January 9 as a National Day of Mourning to honor James Earl Carter, Jr., the 39th President of the United States.
Here’s what the extension covers:
Tax Returns: Any federal tax return that would have been due on January 9, 2025.
Tax Payments: Federal tax payments, including income, payroll, or excise taxes, originally required by that date.
Tax Deposits: Federal tax deposits, including those processed through the Electronic Federal Tax Payment System (EFTPS).
The extension provides taxpayers an extra day to ensure compliance with their federal tax obligations without facing penalties.
If you have returns or payments due on January 9, take advantage of this extended deadline to file or pay by January 10, 2025.
If you underpaid taxes in 2024, consider making a fourth-quarter estimated tax payment by Jan. 15, 2025, to avoid penalties.
The U.S. tax system requires payments throughout the year via paycheck withholdings or quarterly estimated payments. Missing a quarterly payment may lead to penalties when filing your 2025 return.
Who Needs to Pay?
Self-employed individuals or independent contractors.
Those who owed taxes last year and may owe again.
Households with two earners or additional income sources like dividends.
Taxpayers with complex financial situations or inadequate withholding.
What Income is Taxed? Taxable income includes side jobs, gig work, unemployment benefits, digital assets (e.g., cryptocurrency), year-end bonuses, stock dividends, and capital gains.
How to Pay Payments can be made through the IRS Online Account, Direct Pay, EFTPS, or by check to “United States Treasury.”
Making a payment now may reduce or eliminate penalties. Use tools like the IRS The Tax Withholding Estimator or Form 1040-ES to calculate your estimated payment.
Plan ahead and take steps to avoid surprises during the upcoming tax season.
The IRS annually adjusts over 60 tax provisions for inflation to prevent “bracket creep,” where inflation, not income growth, pushes taxpayers into higher brackets or reduces deductions. Since 2018, the IRS has used the Chained Consumer Price Index (C-CPI) for more accurate adjustments. For tax year 2025, filed in 2026, tax parameters will rise by an average of 2.8%, ensuring fairness amid inflation.
Revenue Procedure 2024-40 PDF provides detailed information on adjustments and changes to more than 60 tax provisions that will impact taxpayers when they file their returns in 2026.
Federal Tax Rates and Brackets for 2025
The tax rates remain unchanged, but income thresholds have been adjusted for inflation to prevent “bracket creep.” Here’s how they break down for different filing statuses:
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