Tax season can feel like a whirlwind, but the IRS advises taxpayers to prepare throughout the year to ensure a smooth filing process. Taking proactive steps can help you file accurately and avoid delays in receiving your tax refund. Here’s what you need to know to get ready for the 2025 tax season.
Create an IRS Account
If you haven’t already, setting up an IRS online account is a must. This account gives you access to crucial tax-related information, including:
- Prior tax returns
- Notices and correspondence from the IRS
- The ability to request an IP PIN for additional security
This step is particularly important for young adults (ages 18–24) who may be filing their taxes for the first time. Having this account simplifies accessing documents and ensures you’re ready for tax season.
Gather Tax Records
Staying organized throughout the year is key. The IRS recommends using a waterproof box or folder to store all tax-related documents. Doing so helps you avoid scrambling to find forms when filing season arrives.
Essential Documents to Collect:
- W-2 Forms: These come from your employer and detail your earnings.
- 1099 Forms: For income from banks, dividends, pensions, or gig economy work.
- IRS or Agency Letters: Notices such as CP01A or Form 1095-A.
- Digital Asset Transactions: Reports on cryptocurrency or other digital asset trades.
- Gig Economy Income Statements: Forms like 1099-K, 1099-MISC, or W-2 if you work in freelance or on-demand roles.
Having these records ready can also help you identify eligibility for deductions or credits, such as the Child Tax Credit or education credits.
Check Your ITIN
If you use an Individual Taxpayer Identification Number (ITIN), ensure it’s up-to-date. While the IRS can process your return with an expired ITIN, delays are likely, especially if you’re expecting a refund.
Example:
Claiming credits like the Child Tax Credit or the American Opportunity Tax Credit could mean waiting longer for your refund if your ITIN isn’t valid. Avoid this by renewing or obtaining a new ITIN ahead of time.
Tax Withholding
The IRS encourages taxpayers to review their withholding using the IRS Interactive Tax Assistant. This ensures you’re paying the right amount of taxes—not too much or too little.
Why It Matters:
- If you got a large refund this year, you may be overpaying.
- If you owed taxes, adjusting your withholding can help balance payments for the next tax season.
Fine-tuning your withholding is a step toward receiving a fair refund or reducing your tax liability.
Use Direct Deposit
Finally, ensure you’re set up for direct deposit. This is the fastest way to receive your tax refund. If you’re not already “banked,” consider opening a checking or savings account so the IRS can deposit your refund directly.
Tax preparation doesn’t need to be a last-minute rush. By organizing records, checking ITIN validity, and adjusting withholdings, you’ll be in a strong position to file accurately and on time. Following these tips from the IRS can also help you avoid unnecessary delays in getting your refund.
FAQs
Why should I create an IRS account?
An IRS account gives access to tax returns, notices, and PINs.
What documents are needed for tax filing?
Key forms include W-2, 1099, 1095-A, and digital asset statements.
What happens if my ITIN is expired?
Your return may process, but refunds could be delayed.
How do I adjust my tax withholding?
Use the IRS Interactive Tax Assistant to make adjustments.
Why use direct deposit for tax refunds?
Direct deposit speeds up the refund process.
