Tax filers have several new issues to be aware of as the filing season approaches. As always, being prepared prior to filing your return is the best way to ensure that your tax return is processed speedily and you receive the maximum refund possible in your situation, says Barb Wollan, a health and human sciences educator with Iowa State University Extension and Outreach.
Low-and-moderate-income taxpayers are encouraged to seek a nearby Volunteer Income Tax Assistance site, where IRS-certified volunteers prepare and e-file returns at no cost for qualifying clients, Wollan said. Most households with income below $69,000 are eligible, unless their return involves complex tax issues such as rental income, farm income or a deduction for business use of the home.
VITA sites are located throughout Iowa, including at several ISU Extension and Outreach offices. For information about VITA and to locate a site, visit ISU Extension and Outreach’s VITA webpage.
New deductions from income for 2025 include a deduction for voluntary tip income and a deduction for overtime pay, Wollan continued. Taxpayers will need a statement from their employer that specifies the amount of their pay that is deductible as tips or overtime, since the needed information is not found on the W-2 form.
Individuals over age 65 will also be eligible for a new “senior deduction” of $6,000, on top of their existing standard or itemized deduction amount. No documentation is needed to claim that deduction – it is simply based on the taxpayer’s birthdate.
For the first time, the IRS will not issue taxpayer refunds via paper checks, Wollan noted. All taxpayers will need to provide direct deposit information to receive their refunds. Most taxpayers use either a checking or a savings account and must provide the bank routing number as well as the account number. The account must be in the name of the taxpayer (or one of the taxpayers, if filing jointly); the IRS will not deposit a refund to an account not in the name of the taxpayer.
Taxpayers who wish to have their refund deposited into a pre-paid debit card must also provide routing and account numbers. Neither of these numbers is found on the card itself, so once again, taxpayers must be prepared, Wollan said.
Other examples of information that can affect your final tax bill and refund include costs for daycare; tuition, fees and required supplies for post-secondary education; contributions to a retirement account; business expenses (for those who have self-employment income); and others. Refer to last year’s return for reminders of information and documents that may be needed.
To learn more about tax issues, see “Understanding Taxes,” a free publication available from UpLift, a community-wide learning opportunity on poverty reduction strategies in Central Iowa. Iowa State University associate professor Suzanne Bartholomae and Wollan collaborated with UpLift on the publication.
PHOTO: Blank 1040 us tax form with calculator and keyboard on office desk. (Photo: iStock │ #1469972260 – alfexe)
