Revenue Procedure 2025-13 provides a streamlined method by which taxpayers who have elected the application of the alternative tax under section 831(b) may obtain automatic consent of the Secretary to revoke such election by making certain representations.

WILL BE IN IRB: IRB 2025-8 DATED: 02/18/2025

WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued final regulations identifying certain partnership related-party “basis shifting” transactions as transactions of interest – TOIs – subject to the rules for reportable transactions.

Comments on the proposed rules reflected in the final regulations

Treasury and IRS received comments on the proposed regulations stating that the final regulations should avoid unnecessary burdens for small, family-run businesses, limit retroactive reporting, provide more time for reporting and differentiate publicly traded partnerships, among other suggested changes. The final regulations address these comments and include certain changes reflecting the comments. 

Increased dollar threshold for basis increase in a TOI Treasury and IRS increased the threshold amount for a basis increase in a TOI from $5 million to $25 million for tax years before 2025 and $10 million for tax years thereafter. 

Limited retroactive reporting for open tax years

To address comments on creating an unnecessary burden for taxpayers subject to the disclosure rules of the final regulations, Treasury and IRS limited reporting for open tax years to those that fall within a six-year lookback window. The six-year lookback window is the seventy-two-month period before the first month of a taxpayer’s most recent tax year that began before the publication of the final regulations. In addition, the threshold amount for a basis increase in a TOI during the six-year lookback period is $25 million. 

Additional time for reporting

The final regulations give taxpayers and material advisors more time to file disclosure statements. Taxpayers have an additional 90 days from the final regulation’s publication date to file disclosure statements for TOIs in open tax years for which a tax return has already been filed and that fall within the six-year lookback window. Material advisors have an additional 90 days to file their disclosure statements for tax statements made before the final regulations. 

Publicly Traded Partnerships Because PTPs are typically owned by a large number of unrelated owners, the final regulations exclude many owners of PTPs from the disclosure rules. 

Final Regulations

In June 2024, the Department of the Treasury and the IRS issued proposed regulations that identified certain partnership basis adjustment transactions by related parties as TOIs. Today, Treasury and IRS issued regulations finalizing the proposed regulations, with several important changes, including those described above. 

The final regulations identify certain partnership related-party basis adjustment transactions, and substantially similar transactions, as TOIs. They apply to related partners and partnerships that participated in the identified transactions through distributions of partnership property or the transfer of an interest in the partnership by a related partner to a related transferee. The affected taxpayers and their material advisors are subject to the disclosure requirements for reportable transactions. 

The identified transactions generally result from either a tax-free distribution of partnership property to a partner that is related to one or more partners of the partnership, or the tax-free transfer of a partnership interest by a related partner to a related transferee. The tax-free distribution or transfer generates an increase to the basis of the distributed property or partnership property of $10 million or more ($25 million or more in the case of a TOI undertaken in a tax year before 2025) under the rules of Internal Revenue Code sections 732(b) or (d), 734(b) or 743(b) but for which no corresponding tax is paid. 

The basis increase to the distributed or partnership property allows the related parties to significantly decrease taxable income through increased cost recovery allowances (such as depreciation deductions) or decrease taxable gain (or increase taxable loss) on the disposition of the property subject to the basis increase.

Free File program now open; Direct File available starting Jan. 27 for taxpayers in 25 states

WASHINGTON — The Internal Revenue Service today announced that the nation’s 2025 tax season  will start on Monday, Jan. 27, 2025, and will feature expanded and enhanced tools to help taxpayers as a result of the agency’s historic modernization efforts. 

The IRS expects more than 140 million individual tax returns for tax year 2024 to be filed ahead of the Tuesday, April 15 federal deadline. More than half of all tax returns are expected to be filed this year with the help of a tax professional, and the IRS urges people to use a trusted tax proto avoid potential scams and schemes. 

The 2025 tax filing season will reflect continued IRS progress to modernize and add new tools and features to help taxpayers. Since last tax season, the improvements include more access to tax account information from text and voice virtual assistants, expanded features on the IRS Individual Online Account, more access to dozens of tax forms through cell phones and tablets and expanded alerts for scams and schemes that threaten taxpayers. 

The IRS has also expanded features and availability of last year’s Direct File program. This year, Direct File will be available starting Jan. 27 to taxpayers in 25 states. In addition, the IRS Free File program opens today. Available only on IRS.gov, IRS Free File Guided Tax Software provides millions of taxpayers nationwide access to free software tools offered by trusted IRS Free File partners. 

The IRS is also working to continue the success of the 2023 and 2024 tax filing seasons made possible with additional resources. The past two filing seasons saw levels of service at roughly 85% and wait times averaging less than 5 minutes on the main phone lines, as well as significant increases in the number of taxpayers served at Taxpayer Assistance Centers across the country. Based on the IRS’ current plan and funding levels, the agency will work to provide similar levels of performance on these key service metrics in the upcoming filing season. 

“This has been a historic period of improvement for the IRS, and people will see additional tools and features to help them with filing their taxes this tax season,” said IRS Commissioner Danny Werfel. “These taxpayer-focused improvements we’ve done so far are important, but they are just the beginning of what the IRS needs to do. More can be done with continued investment in the nation’s tax system.”  

The Get Readypage on IRS.gov highlights steps taxpayers can take now to streamline the filing process and the many resources available to interact with the IRS before, during and after filing their federal tax return. 

Direct File opens Jan. 27 for taxpayers in 25 states 

On the first day of the filing season, Direct File will open to eligible taxpayers in 25 states to file their taxes directly with the IRS for free: 12 states that were part of the pilot last year, plus 13 new states where Direct File will be available in 2025. During last year’s pilot, Direct File was available in Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington State and Wyoming. For the 2025 tax filing season, Direct File will also be available in Alaska, Connecticut, Idaho, Illinois, Kansas, Maine, Maryland, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania and Wisconsin. 

Direct File will include new features this year to make filing taxes quicker and easier. Similar to commercial tax software, a data import tool will allow taxpayers to opt-in to automatically import data from their IRS account, including personal information, the taxpayer’s IP PIN and some information from the taxpayer’s W-2. 

This year, Direct File users can try a new chat bot to help guide them through the eligibility checker. Live chat will again be available in English and Spanish, and users can opt into additional authentication and verification, which will allow customer service representatives to provide more information. 

Also, this year, Direct File will cover more tax situations. During the pilot, Direct File supported taxpayers claiming the Earned Income Tax Credit, Child Tax Credit and Credit for Other Dependents. This year, Direct File will also cover taxpayers claiming the: 

• Child and Dependent Care Credit
• Premium Tax Credit
• Credit for the Elderly and Disabled
• Retirement Savings Contribution Credits 

In addition to covering taxpayers claiming the standard deduction and deductions for student loan interest and educator expenses, this year, Direct File will support taxpayers claiming deductions for Health Savings Accounts. The Treasury Department estimates that more than 30 million taxpayers will be eligible to use Direct File across the 25 states. 

Direct File is a web-based service that works on mobile phones, laptops, tablets or desktop computers. It guides taxpayers through a series of questions to prepare their federal tax return step-by-step. Last year, thousands of Direct File users got help from IRS customer service representatives through a live chat feature in English and Spanish. Once taxpayers have completed their federal tax return, the Direct File system automatically guides them to state tools to complete their state tax filings. 

Free File program opens early; available in English and Spanish 

Although the IRS will not begin accepting tax returns until Jan. 27, taxpayers have several options available now to get a head start on their taxes. 

Starting today, almost everyone can file electronically for free by using IRS Free File, available only on IRS.gov. Now in its 23^rd year, Free File offers free tax preparation software from eight companies in the public-private partnership between the IRS and Free File Inc. As part of this partnership, tax preparation and filing software partners offer their online products to eligible taxpayers for free. To access these free tools, taxpayers must start from the IRS Free Filepage on IRS.gov. 

This year, eight private-sector partners will provide online guided tax software products for taxpayers with an Adjusted Gross Income (AGI) of $84,000 or less in 2024. Additionally, one partner will offer a product in Spanish. 

Although the IRS official tax filing season begins later this month, IRS Free File providers will allow taxpayers to prepare and file returns now and hold them until they can be electronically filed on that date. Many other software companies offer a similar option. 

Other free options to file tax returns 

In addition to Free File and Direct File, the IRS reminds taxpayers there are important programs available to help taxpayers:

• Volunteer Income Tax Assistance/Tax Counseling for the Elderly. Taxpayers can find organizations in their community with IRS certified volunteers that provide free tax help for eligible taxpayers including working families, the elderly, the disabled and people who speak limited English.
• MilTax. A Department of Defense program, MilTax generally offers free return preparation and electronic filing software for federal income tax returns and up to three state income tax returns for all military members, and some veterans, with no income limit.

Highlights of other IRS changes to help taxpayers 

As part of ongoing IRS improvement efforts, the agency is working to build on the success of the 2023 and 2024 filing seasons. 

The IRS is once again working to provide taxpayers expanded help in-person through more hours at Taxpayer Assistance Centers nationwide. The IRS also will be focused on continuing high levels of service on its main taxpayer phone lines, with a goal of up to 85% level of service. 

The IRS also continues to urge taxpayers to visit a trusted tax professional for help with their taxes or visit IRS.gov first. As part of IRS improvement efforts since 2022, the agency continues to add and expand a variety of online tools and services to help people with their taxes. 

Included among the improvements taxpayers will see during the 2025 filing season are: 

IRS Individual Online Account: The IRS continues to add more functionality to this important tool. Individuals can create or access their IRS Online Account at Online Account for individuals. With an IRS Online Account, people can: 

• View key details from their most recent tax return, such as adjusted gross income.
• Request an Identity Protection PIN.
• Get account transcripts to include wage and income records.
• Sign tax forms like powers of attorney or tax information authorizations.
• View and edit language preferences and alternative media.
• Receive and view over 200 IRS electronic notices.
• View, make and cancel payments.
• Set up or change payment plans and check their balance. 

New scam alert available on Individual Online Account: To help protect taxpayers against emerging threats, there’s a new banner on the Online Account homepage that alerts taxpayers of potential scams and schemes, along with a link to their Digital Notices and Letters page to view correspondence sent to them from the IRS. The feature helps to educate taxpayers on common scams and fraudulent efforts to steal taxpayer information and provide taxpayers with more ability to validate the legitimacy of IRS communications. 

Redesigned Notices: The IRS successfully redesigned 284 notices in 2024, exceeding the agency’s 200 notice goal. It is important to note that 200 notices were redesigned and deployed in 2024 and that the 84 additional redesigned notices are in line to be deployed in 2025. All notices will be added to Individual Online Account so taxpayers receiving a specific letter can see them. 

Mobile-Adaptive Tax Forms: Taxpayers can now access 67 forms on cell phones and tablets. The most recent forms feature “save and draft” capabilities, which allow the taxpayer to start a form, save it and return to it later. The addition of save and draft allows for future capabilities, including the ability for multiple spouses to sign a form. 

Virtual assistants to help with refunds, others questions: Whether a taxpayer uses an online tool or calls the IRS, they will experience upgraded help features. During filing season 2025, the IRS will offer voicebot services to all taxpayers calling the IRS for refund information. The voicebot is available in English and Spanish and has helped thousands of callers without the need to wait for the next available representative. Taxpayers will have to authenticate their identity to gain access to their refund information by providing select information from their tax return. 

Last year the IRS began using online chatbots for various functions. These chatbots use either guided help through choice buttons or an open text box for a customized question. The chatbots use natural language processing and understanding to interpret the input from the taxpayer to provide an appropriate response. To launch the chatbot, the taxpayer simply clicks on the “Chat” button in the lower right corner of the webpage. Currently taxpayers can use chatbots from eight webpages. 

Taxpayers should check ‘Where’s My Refund?’ on IRS.gov 

Most refunds are issued in less than 21 calendar days. Taxpayers can use Where's My Refund? to check the status of their 2024 income tax refund within 24 hours of e-filing. Refund information is normally available after four weeks for taxpayers who filed a paper return. Information on Where's My Refund? will update overnight so there is no need to check the tool more than once a day. 

The easiest, safest and fastest way to receive a refund is to file electronically (e-file) and select direct deposit. According to Treasury’s Bureau of the Fiscal Service, paper refund checks are 16 times more likely to have an issue, like the check being lost, misdirected, stolen or uncashed. People should check FDIC and National Credit Union Administration websites if they don’t have a bank account. Veterans can use the Veterans Benefits Banking Program to find participating financial institutions.  

The IRS also notes that starting Jan. 1, 2025, people will no longer be able to buy paper Series I savings bonds with their tax refund. Instead, Series I bonds are available in electronic format in TreasuryDirect.   

Choose a trusted tax professional 

More than half of taxpayers turn to a tax professional for help filing a tax return. While most tax preparers deliver exceptional and professional service, selecting the wrong preparer can lead to financial harm. 

Taxpayers should review the tips for choosing a tax preparer and learn how to avoid unethical “ghost” return preparers. Taxpayers can also use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to find trusted professionals. The IRS also reminds taxpayers that choosing someone affiliated with a recognized national tax association is always a good option. 

Tax professionals accepted into the IRS electronic filing program are authorized IRS e-file providers, qualified to prepare, transmit and process electronically filed tax returns.

Notice 2025-10 describes forthcoming proposed regulations on the § 45Z clean fuel production credit (§ 45Z credit) enacted under the Inflation Reduction Act of 2022. In addition to providing background on the § 45Z credit, the notice explains the forthcoming proposed regulations and requests public comments on the draft text of the forthcoming proposed regulations contained in the appendix. The draft text includes intended rules on how to calculate the credit, allowed methodologies for determining emissions rates, unrelated party certification of emissions rates, how to claim the credit, and requirements for registration. 

Notice 2025-11 provides taxpayers with guidance about emissions rates, including the initial emissions rate table, for the clean fuel production credit.  For a transportation fuel established on the emissions rate table that is not a sustainable aviation fuel, this notice directs a taxpayer producing such fuel to calculate emissions rates using the most recent determinations under the new 45ZCF-GREET model.  For a transportation fuel established on the emissions rate table that is a sustainable aviation fuel, this notice directs a taxpayer producing such fuel to calculate emissions rates using either determinations from fuel pathways approved under the most recent version of the CORSIA Program or the most recent determinations under the 45ZCF-GREET model.  This notice also requests public comments. 

Notice 2025-10 & Notice 2025-11 will be in IRB:  2025-5, dated 01/27/2025.

WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued proposed regulations addressing certain SECURE 2.0 Act provisions, including a provision generally requiring newly-established 401(k) and 403(b) plans to automatically enroll eligible employees beginning with the 2025 plan year. 

In general, unless an employee opts out, a plan must automatically enroll the employee at an initial contribution rate of at least 3% of the employee’s pay and automatically increase the initial contribution rate by one percentage point each year until it reaches at least 10% of pay. This requirement generally applies to 401(k) and 403(b) plans established after Dec. 29, 2022, the date the SECURE 2.0 Act became law, with exceptions for new and small businesses, church plans, and governmental plans. 

The proposed regulations provide guidance to plan administrators for properly implementing this requirement and are proposed to apply to plan years that begin more than 6 months after the date that final regulations are issued. Before the final regulations are applicable, plan administrators must apply a reasonable, good faith interpretation of the statute. 

Treasury and IRS welcome comments on these proposed regulations. Comments may be submitted through the Federal Register. See the proposed regulations for details.

Inside This Issue

1. IRS: 2025 tax filing season to start on Jan. 27; agency continues historic improvements to expand, enhance tools and filing options
2. National Taxpayer Advocate delivers annual report to Congress
3. Get Ready to file taxes in 2025
4. Final 2024 quarterly estimated tax payment due Jan. 15
5. Don’t miss out on the upcoming EITC Awareness Day
6. Treasury, IRS issue proposed regulations on new Roth catch-up rule, other SECURE 2.0 Act provisions
7. Treasury, IRS issue final rules identifying partnership related-party “basis shifting” transactions as transactions of interest
8. Upcoming webinars for tax professionals
9. Technical Guidance

1.  IRS: 2025 tax filing season to start on Jan. 27; agency continues historic improvements to expand, enhance tools and filing options

The nation’s 2025 tax season will start on Monday, Jan. 27, and will feature expanded and enhanced tools to help taxpayers due to the agency’s historic modernization efforts. Since last tax season, the improvements include more access to tax account information from text and voice virtual assistants, expanded features on the IRS Individual Online Account, more access to dozens of tax forms through cell phones and tablets, and expanded alerts for scams and schemes that threaten taxpayers. The IRS is once again working to provide taxpayers expanded help in-person through more hours at Taxpayer Assistance Centers nationwide. The IRS also will be focused on continuing high levels of service on its main taxpayer phone lines, with a goal of up to 85% level of service. “These taxpayer-focused improvements we’ve done so far are important, but they are just the beginning of what the IRS needs to do,” said IRS Commissioner Danny Werfel. “More can be done with continued investment in the nation’s tax system.”

The IRS expects more than 140 million individual tax returns for tax year 2024 to be filed ahead of the Tuesday, April 15 federal deadline. More than half of all tax returns are expected to be filed this year with the help of a tax professional, and the IRS urges people to use a trusted tax pro to avoid potential scams and schemes.

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2.  National Taxpayer Advocate delivers annual report to Congress

National Taxpayer Advocate Erin M. Collins released her 2024 Annual Report to Congress on Jan. 8. For the first time since 2020, Collins reports the taxpayer experience has noticeably improved, but backlogs in identity theft cases, the processing of Employee Retention Credit claims and scams targeting taxpayers and tax professionals continue to be problems. By law, the Advocate’s report must identify the 10 most serious problems taxpayers are experiencing in their dealings with the IRS and makes administrative and legislative recommendations to address those problems. Some key recommendations include protecting taxpayers in federally declared disaster areas who receive filing and payment relief from inaccurate and confusing collection notices, adjusting estimated tax payment deadlines to occur quarterly, and establishing a uniform mileage deduction rate for all purposes.

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3.  Get Ready to file taxes in 2025

Tax pros: Remind your clients to Get Ready now to file their taxes. Visit the Get Ready page for key information about gathering and organizing tax records, life changes that can affect a refund, what to do with a Form 1099-K, home and energy related credits, how to avoid refund delays and refund timing.

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4.  Final 2024 quarterly estimated tax payment due Jan. 15

If you have clients who paid too little tax in 2024, encourage them to make a fourth quarter estimated tax payment on or before Jan. 15. The Tax Withholding Estimator, available on IRS.gov, can help people determine if they need to make an estimated tax payment. It also helps taxpayers calculate the correct amount of tax to withhold throughout the year based on their complete set of tax facts and circumstances.

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5.  Don’t miss out on the upcoming EITC Awareness Day

Preparations are underway for the 19th annual Earned Income Tax Credit (EITC) Awareness Day, taking place on Jan. 31. IRS partners will be hosting awareness day events nationwide and sharing EITC outreach to ensure taxpayers are aware of the credit. Tax pros: the IRS asks you to share the details about EITC with your clients. Individuals who qualify for the EITC must file a tax return to claim the credit. Visit the EITC Awareness day webpage for more information.

EITC started as a modest tax credit that provided financial assistance to low-income, working families with children. Through numerous legislative changes over the past 50 years, the credit is one of the federal government’s largest anti-poverty programs providing cash support to low-income working families.

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6.  Treasury, IRS issue proposed regulations on new Roth catch-up rule, other SECURE 2.0 Act provisions

The Department of the Treasury and the IRS issued proposed regulations addressing several SECURE 2.0 Act provisions relating to catch-up contributions, which are additional contributions under a 401(k) or similar workplace retirement plan that generally are allowed with respect to employees who are age 50 or older. This includes proposed rules related to a provision requiring that catch-up contributions made by certain higher-income participants be designated as after-tax Roth contributions. The proposed regulations provide guidance for plan administrators to implement and comply with the new Roth catch-up rule and reflect comments received in response to Notice 2023-62, issued in August 2023.

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7.  Treasury, IRS issue final rules identifying partnership related-party “basis shifting” transactions as transactions of interest

The Department of the Treasury and the IRS issued final regulations identifying certain partnership related-party “basis shifting” transactions as transactions of interest subject to the rules for reportable transactions. They apply to related partners and partnerships that participated in the identified transactions through distributions of partnership property or the transfer of an interest in the partnership by a related partner to a related transferee. The affected taxpayers and their material advisors are subject to the disclosure requirements for reportable transactions.

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8.  Upcoming webinars for tax professionals

The IRS offers the upcoming live webinars to the tax pro community:

• The ABCs of Due Diligence on Jan. 14 at 2 p.m. ET. Earn up to 1CE credit (Federal Tax). Visit the webinar’s registration page for more information and to register.
• Steering Clear of Mistakes – A Review of Refundable Credits Eligibility Rules on Jan. 16 at 2 p.m. ET. Earn up to 1 CE credit (Federal Tax). Visit the webinar’s registration page for more information and to register.
• Document Upload Tool on Jan. 21 at 2 p.m. ET. Earn up to 1 CE credit (Federal Tax). Visit the webinar’s registration page for more information and to register.
• New Features for Tax Pros: Do Business Faster and Easier with IRS Online on Jan. 23 at 2 p.m. ET. Earn up to 2 CE credits (Federal Tax). Visit the webinar’s registration page for more information and to register.

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9.  Technical Guidance

Notice 2025-06 requests comments on any potential implications if the characterization rules currently contained in sections 1.861-18 and 1.861-19, as amended and added, respectively, by Treasury Decision 10022, were to apply to all provisions of the Internal Revenue Code, including the need for additional guidance, and seeks specific comments on the possible impacts and guidance that may be necessary with respect to certain identified provisions.

Revenue Procedure 2025-10 modifies and supersedes Revenue Procedure 85-18, 1985-1 CB 518; it clarifies the provisions of Rev. Proc. 85-18 with respect to the definition of employee, the section 530 requirement for the filing of required returns, and the reasonable basis safe harbor rules.

Revenue Procedure 2025-11 provides the process under section 48E(h) of the Internal Revenue Code to apply for an allocation of Capacity Limitation as part of the Clean Electricity Low-income Communities Bonus Credit Amount Program for 2025 and subsequent years.

Revenue Ruling 2025-3 addresses the application of section 530 of the Revenue Act of 1978 (section 530), section 3509 rates, and the requirements to issue a Notice of Employment Tax Determination Under IRC section 7436 (section 7436 Notice) in several distinct factual situations.

Revenue Ruling 2025-3addresses the application of Section 530 of the Revenue Act of 1978 (section 530), section 3509 rates, and the requirements to issue a Notice of Employment Tax Determination Under IRC § 7436 (§ 7436 Notice) in several distinct factual situations. Internal Revenue Code section 3509 allows an employer to remit unpaid taxes at reduced rates if an employer fails to deduct and withhold income tax or the employee share of FICA tax with respect to any of its employees because the employer treated that employee as a non-employee.

Revenue Procedure 2025-10modifies and supersedes Revenue Procedure 85-18, 1985-1 CB 518; it clarifies the provisions of Rev. Proc. 85-18 with respect to the definition of employee, the section 530 requirement for the filing of required returns, and the reasonable basis safe harbor rules. This revenue procedure also amplifies the guidelines set forth in section 3.03 of Rev. Proc. 85-18 (interpreting the word “treat” for purposes of determining whether a taxpayer did not treat an individual as an employee for purposes of section 530(a)). This revenue procedure also includes new provisions that reflect statutory changes made to section 530 since 1986 that added sections 530(d), (e), and (f).  Section 530 of the Revenue Act of 1978 (as amended) was enacted to provide relief to taxpayers involved in worker classification disputes with the IRS. Section 530 is not an Internal Revenue Code provision.

Revenue Ruling 2025-3 and Revenue Procedure 2025-10 will be published in Internal Revenue Bulletin 2025-4 on Jan. 21, 2025.

WASHINGTON - The Internal Revenue Service today granted taxpayers an extra day, until Friday, Jan. 10, 2025, to file any return or pay any tax originally due on Thursday, Jan. 9.

 

The IRS granted the extra time following the Dec. 29 Presidential Proclamation marking Jan. 9 as a National Day of Mourning for James Earl Carter, Jr., the thirty-ninth President of the United States.

 

The one-day extension applies to any return required to be filed with the IRS on Thursday, Jan. 9, 2025. It also applies to any required federal tax payment originally due on that day.

 

In addition, it also applies to any federal income, payroll or excise tax deposit due on Jan. 9, 2025, including those required to be made through the Treasury Department’s Electronic Federal Tax Payment System (EFTPS).

The Internal Revenue Service (IRS) has announced several key adjustments for the 2025 tax year, reflecting annual inflation and legislative changes. Here's an overview of the most significant updates affecting federal income tax returns:   1. Standard Deduction Increase   Single Filers: The standard deduction rises to $15,000, up from $14,600 in 2024.   Married Filing Jointly: Increases to $30,000 from $29,200.   Head of Household: Now $22,500, up from $21,900.     2. Adjusted Income Tax Brackets   Tax brackets have been modified to account for inflation. Notably:   The top 37% rate applies to incomes over $626,350 for single filers and $751,600 for married couples filing jointly, up from $609,350 and $731,200, respectively, in 2024.     3. Retirement Contribution Limits   401(k), 403 (b) and 457 Plans: Contribution limits increase to $23,500 from $23,000.   Catch-Up Contributions: Normally $7,500 if over 49, but for individuals aged 60 to 63, a new catch-up contribution limit of $11,250 is introduced, $3,750 higher than the standard catch-up amount.   IRAs  $7,000, plus $1,000 catch-up if over 49   Simple IRAs: Contribution limit increased to $16,500, plus $3,500 catch-up if over 49. (Increased by 10% for employers with fewer than 25 employees). Those age 60-63 can save $5,250 as a catch-up contribution   SEP IRAs: Contribution limit increased to $70,000     4. Earned Income Tax Credit (EITC)   The maximum EITC amount has been adjusted for inflation, providing increased benefits to eligible taxpayers.     5. Annual Gift Tax Exclusion   The exclusion amount rises to $19,000 per recipient, up from $18,000 in 2024, allowing individuals to gift more without incurring tax liabilities.         6. Estate Tax Exemption   The lifetime estate exemption increases to nearly $14 million, up from $13.61 million in 2024, enabling larger transfers of wealth without estate tax implications.     7. Child Tax Credit   The refundable portion of the Child Tax Credit remains at $1,700 for 2025, unchanged from 2024.     8. Mileage Rates   Business Use: 70 cents per mile, an increase of 3 cents from 2024.   Medical Purposes: 21 cents per mile, unchanged from 2024.   Moving Purposes (for qualified active-duty members of the Armed Forces): 21 cents per mile, unchanged from 2024.   Charitable Organizations: 14 cents per mile, unchanged from 2024 (this rate is set by statute). .

Revenue Procedure 2025-11 provides the process under § 48E(h) of the Internal Revenue Code to apply for an allocation of Capacity Limitation as part of the Clean Electricity Low-income Communities Bonus Credit Amount Program for 2025 and subsequent years.

Revenue Procedure 2025-11 will be published in Internal Revenue Bulletin 2025-4, on Jan. 21, 2025.