Countdown to Tax Season 2025: What You Need to Know Now

As the ball drops and we move from 2024 to 2025, it’s time to start thinking about tax season—it’s closer than you think! The IRS has already rolled out several updates to help taxpayers prepare for filing their 2024 federal income tax returns. Staying ahead of these changes can make your filing process smoother and stress-free.

One notable update is the change to 1099-K reporting requirements. If you received over $5,000 in payments for goods and services through an online marketplace or payment app in 2024, you can expect to receive a 1099-K form in January 2025. This change highlights the IRS’s focus on improving reporting transparency for online transactions, so keep track of your income throughout the year.

Another key point is the requirement to report all digital asset-related income. Digital assets include cryptocurrencies, stablecoins, and NFTs (non-fungible tokens)—basically, any property stored electronically that can be bought, sold, transferred, or traded. If you had any digital asset transactions in 2024, you’ll need detailed records documenting their purchase, receipt, sale, exchange, or other disposition. This readily available information will save time and ensure compliance with IRS rules.

To further streamline the process, the IRS advises taxpayers to gather and organize all necessary 2024 tax documents in advance. These may include W-2s from employers, various Forms 1099 (such as 1099-NEC for nonemployee compensation, 1099-MISC for miscellaneous income, and 1099-INT for interest income), and documentation of any digital asset transactions. Proper organization reduces the risk of errors, delays, or refund issues when filing.

With tax season approaching, a little preparation now can pay off in big ways later. These updates are just the beginning, so stay informed and get a head start on your 2024 tax return to avoid last-minute surprises! If you’d like more information, feel free to reach out to The Center for Financial, Legal, & Tax Planning Inc. at (618) 997-3436.