“There aren’t a lot of huge changes in our tax filing this year,” says Tim Rupert, professor of accounting at Northeastern.
Tax season is in full swing, which means millions of people are starting to receive their W-2s in the mail.
Tax Day — the deadline to file returns, pay taxes or request an extension — is April 15. State deadlines vary. The Internal Revenue Service typically issues most refunds in less than 21 calendar days.
Need advice for where to begin with your taxes? For many people, the process will be as straightforward as it’s been in previous years — for others, there are some important changes.
President Trump has floated a number of potential changes to tax law, including actions that would eliminate federal taxes on tipped income and taxes on Social Security benefits, as well as increasing the limit on state and local taxes. None of those changes have been implemented yet, so taxpayers can expect few surprises when they go to file this year.
But there have been a few important changes.
For freelancers, business owners or others who make money on the side, a change in the law requires individuals with income from online sales of $5,000 or more to fill out a 1099-K tax form. The new requirements include transactions that occurred through PayPal, Venmo, Cash App and other third-party services.
Websites such as PayPal and eBay may still issue 1099-K tax forms, even if users did not exceed the $5,000 income threshold.
“I think one of the key things to recognize about this change is that you will get one of these 1099-K forms if you have gross receipts of more than $5,000,” Rupert says.
But, he says, “that doesn’t mean that all of that income is taxable.” Only the profit associated with these income streams is taxable, Rupert says.
“That means that people are going to need to be more careful with their recordkeeping,” Rupert says. “In our tax system, in order to deduct an expense associated with your business, you have to have a record of it. There’s always the chance, especially with the increase in reporting, that the IRS decides to audit your return or look at your transactions.”
There are easier ways to keep track of receipts, such as using accounting or business budget apps designed to help you stay organized.
Officials pursued a phased rollout for the new rule, initially introduced in 2022. For the 2025 tax year, the threshold will drop to $2,500. In 2026, it will drop to $600.
The IRS is urging filers not to overlook specific tax credits that could cut down their bills. Some of those credits include the child tax credit, the earned income credit and credits for higher education expenses. “They are things that people sometimes forget to take on their tax returns,” Rupert says.
“The eligibility for the earned income tax credit can be a little bit more difficult to work through, so it’s important to take some time for that,” Rupert says.
“Unfortunately there’s a lot of noncompliance with the earned income tax credit, so it’s something that the IRS looks at closely,” he says.
Last year, the IRS rolled out its own software filing system, called Direct File, on a pilot basis in 12 states. This year, the system now services individuals in 25 states and has expanded the types of income and deductions that can be reported.
Some changes to tax law are expected over the course of the next fiscal year. The Tax Cuts and Jobs Act in 2017, a law passed during Trump’s first term, included tax cuts for the middle class, among a number of other provisions. Many of those provisions will be sunsetting at the end of this year, Rupert says.
“Congress has been waiting to see what’s going to happen with that,” he says.
“The issue that they face is that it costs a lot of money to continue those tax benefits. So the question is how long will they be able to extend those benefits — and what does that mean for the deficit?”