MW Here's when you can file your 2024 taxes - and what's new this year with refunds, tax laws and free tax prep

Andrew Keshner

Income-tax refunds averaged more than $3,100 last year. How much will they be this year?

The Internal Revenue Service has set its calendar for the upcoming tax-filing season: Americans can start submitting their income-tax returns on Monday, Jan. 27.

As people send in their 2024 federal tax returns, they can expect technological upgrades, customer-service improvements and more ways to file for free, according to the IRS.

"These efforts are all about making the process of filing taxes easier and less stressful for taxpayers and also making it more cost-efficient," IRS Commissioner Danny Werfel told reporters Friday. "More tools, more simplicity, less stress, less burden."

The IRS is expecting to handle more than 140 million returns by the April 15 filing deadline.

Income taxes are an annual rite for Americans, as well as a major financial event for millions of people. Yet each filing season comes with its own twists.

This year, people will see bumped-up tax brackets and a higher standard deduction, thanks to the tax code's automatic adjustments for inflation.

As Americans file their taxes, federal lawmakers will be debating the direction of tax policy after the 2017 Trump tax cuts sunset at the end of this year. They'll also decide how much funding the IRS will get for enforcement and customer service.

A sufficiently funded IRS is a good investment for the country, Werfel said Friday. Congress recently voted to put $20 billion in extra IRS funding out of the agency's reach.

Meanwhile, there are new laws and IRS procedures that will change the tax picture for some Americans. These include a measure aimed at helping victims of natural disasters, and a lower bar for small-business owners and gig workers to report certain payments to the IRS.

The clock is officially ticking on the tax-filing season. Here's what to expect.

What are this year's tax-filing deadlines?

The IRS will start accepting and processing 2024 income-tax returns on Monday, Jan. 27. The deadline to pay 2024 taxes owed in order to avoid penalties and interest is Tuesday, April 15 - which is also the deadline to file for an extension to Oct. 15. Remember that an extension offers taxpayers more time to file a return, not more time to pay any taxes they owe.

In the weeks ahead of tax season's official start, taxpayers should start gathering the documents that employers, contractors, lenders, banks and brokers provide that show income, expenses and losses.

Employers are supposed to provide employees their W-2 forms by Jan. 31, according to the IRS. These are the tax forms showing the wages and tips that were paid to a worker in 2024, and the amounts that were withheld for federal and state taxes.

When can you expect your refund, and how big will it be?

A refund is money the IRS pays back to a taxpayer after an overpayment on taxes, after factoring in deductions and credits. Some people view a refund as an interest-free loan to the government and believe there's no reason to be happy if you get one every year.

Nevertheless, most people do get a refund. Last year, the tax collector received over 163 million returns, and almost two-thirds resulted in refunds. In 2024, the average refund was $3,138.

"For many households, that refund will be their biggest check of the year. Our employees know that," Werfel said.

The IRS says it can turn around refunds in under 21 days, if not faster, for most taxpayers. People can check their refund status by using the agency's "Where's My Refund?" tool. Upgrades this year will also let people check their refund status via an automated phone service.

The IRS recommends filing taxes electronically, but it will accept paper returns that are mailed in. More than 90% of households filed their returns electronically last year, IRS numbers show. Filing electronically is one way taxpayers can get their refund faster.

What are this year's tax brackets and standard deduction?

Inflation indexing for the tax code happens each year without the need for new laws, and those automatic increases have absorbed a lot in recent years.

When people calculate their 2024 taxes, they'll be using tax brackets that increased 5.4% over the previous year. That jump for the ranges on the seven tax brackets is the second-highest in years, following the previous year's 7% jump.

The standard deduction, used by nine out of 10 taxpayers, went up by 5.4% as well, increasing to $14,600 for individuals and $29,200 for married couples filing jointly.

Heads up if you were paid money via PayPal, Venmo, Etsy or eBay

People who were paid for goods or services over platforms like PayPal (PYPL), Venmo, Etsy $(ETSY)$ and eBay $(EBAY)$ may need to look for tax forms this year that they didn't receive last year.

These third-party platforms will send out 1099-K forms reporting income once payments reach $5,000, rather than the previous threshold of $20,000. The IRS is implementing a law that will eventually require income reporting to kick in at $600.

More generous help for victims of natural disasters

Victims of natural disasters like Hurricane Helene and Hurricane Milton should check to see how a new law, the Federal Disaster Tax Relief Act, can help them. The tax code already offered some relief to victims of federally declared disasters on their unreimbursed losses, and the new law simplifies formulas and enables taxpayers to take the standard deduction while also taking deductions on their losses.

Did you bet on the presidential election?

People who made money betting on the outcome of the 2024 presidential election should be prepared to pay taxes on their earnings. That's taxable income, experts say.

There are new ways to do your taxes for free this year

The IRS is estimating that taxpayers will spend an average of $290 on tax preparation this year, up more than 7% from last year's cost projections.

But there are ways some people can do their taxes for free. The trick for taxpayers is knowing the fine print and understanding how that lines up with their specific tax needs.

Commercial tax-software companies may offer free tax preparation, at least for the federal income-tax return, for people with simple returns.

There are also two ways to get free tax prep through the IRS itself.

The agency's Free File service is a partnership with tax-software companies. Users can prepare their returns for free as long as their adjusted gross income is $84,000 or less. Users may need to pay for preparation of their state income-tax return, depending on the provider. The Free File program is open as of Jan. 10.

The IRS Direct File service, meanwhile, is the no-fee tax-filing platform run by the IRS. After a pilot run last year in 12 states, Direct File will be available in 25 states this year and will be able to handle a wider swath of returns. It goes live on Jan. 27, but taxpayers can check their eligibility now.

There's a limited range of tax scenarios the Direct File platform can handle, but it has expanded from the tool's capacity last year.

It can support taxpayers who report wage income and Social Security income, but not small-business owners or people who earn income from gig work.

Direct File will also help people claim the child tax credit, the earned-income tax credit and credits for getting healthcare coverage through the Obamacare exchange. People who take the standard deduction can use the program, but people who itemize their deductions cannot.

One open question is whether the program will be operating come tax time. Some congressional Republicans are calling on President-elect Donald Trump to shut down the program as soon as he gets into office.

For now, it's still a go for Direct File, Werfel said Friday. "This is the plan that we have been working on closely with our current leadership at the Treasury Department," he told reporters.

Trump has picked former U.S. Rep Billy Long, a Republican from Missouri, to lead the IRS. During his time in Congress, Long co-sponsored a bill that would have eventually eliminated the IRS.

Under the incoming Trump administration, some observers expect the agency to tone down its audit approach but maintain a focus on customer service.

On Friday, Werfel was asked how long he plans to stay with the IRS, with a new commissioner appointee waiting in the wings.

"I am laser-focused and spend every waking hour during the day, and quite frankly during the night, focused on one thing and one thing only," Werfel responded. "And that's getting ready for this filing season. "

-Andrew Keshner

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January 10, 2025 15:55 ET (20:55 GMT)

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