The Internal Revenue Service (IRS) will start accepting and processing income tax returns on January 27, 2025. Here's what you need to know about 2024 tax refunds this year.
What’s new and what changed for 2024 (2025 filing season)
Here are some changes that could affect how you file your 2024 taxes:
Sold items via digital platforms or apps The new tax law triggers the tax form 1099-K if you receive payments valued over $600 from platforms or apps like PayPal, Venmo, Etsy, Facebook Marketplace, or others. The reason for that is because the IRS lowered the threshold from $20,000 to $5,000 for the tax year 2024.
Healthcare coverage from the ACA marketplace (heathcare.gov) A temporary pandemic-related rule, in effect through the end of the 2024 tax year, allows more individuals to qualify for the Premium Tax Credit (PTC) and benefit from a larger tax break. This rule extends eligibility to those with a household income exceeding 400% of the federal poverty level. It also reduces the percentage of income households must contribute toward premiums to a range of 0-8.5%, resulting in larger credits for eligible taxpayers.
As 2025 marks the final year for this rule, taxpayers should prepare for changes in 2026, when the overall Premium Tax Credit will decrease, leading to higher premium costs for individuals.
Inherited a retirement account If you inherited a retirement account due to the death of a loved one but are not classified as an Eligible Designated Beneficiary*, it's important to understand how the Required Minimum Distribution (RMD) rules have changed under the 2024 tax updates regarding the 10-year rule.
If the account was inherited from someone who:
Had already started taking RMDs: You must continue taking annual RMDs for the first nine years after the account owner’s death and ensure the entire balance is withdrawn by the end of the tenth year. However, the annual distribution requirement is suspended through 2024, meaning you won’t need to take RMDs until 2025.
Had not yet started taking RMDs: You are not required to take RMDs during the first nine years after the account owner’s death, but you must fully withdraw the account balance by the end of the tenth year.
* Eligible Designated Beneficiaries are defined as surviving spouse, minor children of the account owner, disabled or chronically ill individuals, and beneficiaries not more than 10 years younger than the deceased. These beneficiaries can take distributions over the course of their lifetime (depending on their life expectancy) or they choose the 10-year rule if the account owner passed before starting RMDs.
When to expect your tax refund in 2025
One positive development is that the IRS has incorporated new technologies and claims that these will speed up processing tax returns more efficiently compared to previous years. According to the most recent information available, the IRS still anticipates issuing more than nine out of ten refunds in less than 21 days, if you:
file electronically,
rely on direct deposit,
file without a tax refund loan or similar products, and
experience no problems with your return.
The IRS also stated that most e-filed tax refunds can be directly deposited into taxpayers' bank accounts within as little as 10 days after the IRS receives the return.
If you filed a paper tax return, your tax return may take between 3-4 weeks to be processed or longer if you expect a tax refund.
Besides filing on paper, we've listed several other factors and their delay time, which can determine when taxpayers might receive their tax refund:
Up to six months Filing the Form 1040-NR – requesting a refund of tax withheld on Form 1042-S
One month Claimed EITC (Earned Income Tax Credit) or ACTC (Additional Child Tax Credit)
Up to five days Filing late March through April 15 (during peak season)
Avoiding delays Only if you are still awaiting processing of your 2021 tax return for acceptance by the IRS, enter $0 for last year’s AGI (Adjusted Gross Income) on your 2022 tax return. All other taxpayers should enter the correct AGI from last year's return.
How much tax refund can you expect this tax season for the tax year 2024
The adjusted increases for certain tax credits, deductions, and tax brackets in the 2023 tax year, when accounting for inflation, might result in more substantial tax refunds when you file your taxes in 2024.
According to the Tax Foundation, the tax bracket ranges are set to increase by an average of $750 for the 2024 tax year. The IRS announced that the standard deduction will increase by 5.2% or 5.4% and the Earned Income Tax Credit amount by 5.3%, depending on the filing status.
Increase of standard deduction for the 2024 tax year
The standard deduction, preferred by 90% of taxpayers over itemizing, is receiving an inflationary boost and seniors over age 65 may claim an additional standard deduction of $1,950 (single filers) and $1,550 (joint filers).
Compared to the previous year, the standard deduction will see an increase by:
$1,500 for married couples filing jointly,
$1,100 for head of household filers and
$750 for single and married individuals filing separately.
For the 2024 tax year, the Earned Income Tax Credit will be increased!
The maximum Earned Income Tax Credit amount for qualifying taxpayers who have three or more qualifying children in 2024 is $7,830 — an increase of $400 compared to the 2023 tax year. The IRS provides a table with the maximum EITC amount for other categories, income thresholds, and phase-outs in its revenue procedure.
But please also consider that the IRS could use all or part of your refund to pay off your debts, including:
past-due federal or state income tax,
state unemployment compensation debts,
child support, spousal support, and
student loans.
Some loans currently on a repayment pause, such as federal student loans, commercially held federal family education loans, or FFELP debt, may be exempt from tax.
Entering into an installment agreement, however, does not exempt you from any outstanding tax you may owe. The installment agreement stipulates that the IRS will automatically apply any refund to the outstanding tax amount. You should keep your payments as usual since your refund won't be offset against your regular monthly payment.
More tax inflation changes were made
Some items adjusted for inflation by the IRS include:
The Alternative Minimum Tax exemption amount (an increase of $4,400),
qualified transportation fringe benefit ($15 more than in 2023),
foreign earned income exclusion ($6,500 more than in 2022),
the annual exclusion for gifts increases to $18,000 ($1,000 more compared to 2023),
only medical expenses that exceed 7.5% of adjusted gross income (AGI) can be deducted in 2024,
and much more can be found in the 2024 IRS news release.
How to check on your Refund Status
Typically, you can access details about your refund within 24 hours of the IRS acknowledging the receipt of your electronically filed return or approximately four weeks following the paper return submission.
Working with tax professionals like VauntCourier guarantees you the fastest way to receive your tax refund! Independent of your tax preparer, if you’d like to know how far along your return has already been processed, you can simply use the IRS website tool “Where’s My Refund?” or the IRS mobile app “IRS2Go” from your smartphone. To Access both you’ll need your:
SSN,
filing status, and
refund dollar amount
shown on your tax return.
The “Where’s My Refund?” status is displayed in three stages:
Return Received It literally means what it says —the IRS has acknowledged receipt of your tax return.
Refund Approved Your refund will be prepared for transfer to you using your chosen payment method.
Refund Sent Your refund is on its way! Before checking with your bank wait at least five days. Remember that bank policies on the availability of deposit funds may vary. You can count on approximately 6-8 days for delivery if you've requested a paper check.
Does the “Where is My Refund” status tell you to call or submit additional information, you should do so immediately.
For amended returns please use the IRS “Where’s My Amended Return?” tool and note that it'll take much longer to be processed by the IRS.
You can also call the automated hotline to check on your 2022 refund or to report a lost, stolen, or destroyed refund check:
Regular Returns 1.800.829.1954
Amended Returns 1.866.464.2050
You can’t initiate a trace using the automated hotline if you've filed jointly—then you’ll have to complete Form 3911 (PDF).
Tips on what to avoid while waiting for your 2023 tax refund
Many taxpayers find it difficult to wait for their tax refunds. To make it easier for you, here are some tips on what to avoid:
Avoid making a time-sensitive purchase without having your tax refund in hand. If we've learned anything in recent years, it's that things often don't go to plan. Even if you believe to know what you're getting and the IRS expects to issue timely refunds this year—don't spend money that you don't already have. File electronically & avoid paper returns.
Don't call your tax preparer to check on the status of your tax refund They have no other information in their system that isn't available from the IRS. Pay special attention to EIP, EITC, and CTC submissions
Never file a second return Some taxpayers believe that filing a second tax return defers their refund to an earlier date. It will likely just do the opposite!
VauntCourier will assist you every step of the way!
Appointments are available at our Wiesbaden Office, Clay Kaserne Office or via Online Video Chat (Skype, Zoom, Google Meets, WhatsApp, or any other service you prefer)
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