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20 Things you never knew before filing a Tax Return: common tax deductions and taxes in 2025
Filing a tax return is not as straightforward as it might seem. This can include the filing of multiple forms, deductions, and credits. For first-time filers and seasonal professionals as well, here are some important things to consider related to tax returns.
The Filing Status is important.
The filing status means whether you are single, married, or filing jointly with your spouse. This can affect aspects like the tax bracket, deductions, and credits as well. Selecting the right filing status can help you save a lot of bucks. For instance, people who have the head of household status can benefit from a lower tax rate and better deductions as compared to single individuals.
The IRS file for free feature
For those whose income falls under $73,000, the IRS provides a file for a free feature that incorporates tax preparation software for commercial use. This allows a taxpayer to file their income tax and federal tax return at little to no cost. If you are worried about the software, it is a relatively easy software and has a user-friendly interface.
Keep track of deadlines.
The IRS incorporates a strict deadline for filing returns, which is April 15 each year. Failure to file by this date can mean you incur penalties and interest for your unpaid taxes. For those who, for some genuine reason, are unable to file on time, they can request an extension by the IRS; this, however, only provides time for extra payment; for filing, the due date is the original deadline.
Filing can still be completed even for those who don’t have all the tax forms.
There are some individuals that don’t have all the required documents for filing. This can be a W-2 or 1099 form, or any other form. But you can file the form to get rid of late fees and submit the return when the final document is returned by the IRS.
State Taxes are distinct from federal taxes.
Apart from federal taxes, many state have their own tax returns. State tax laws can differ a lot, so filing a state return is important for those living in a state and having income taxes. These states like Florida and Texas are the states with no income taxes. Also, many tax filings for individuals and businesses. Make sure to understand your state tax’s individual tax requirements.
The Basic Deduction is significantly high to file your tax return.
The standard deduction can significantly reduce your taxable income and can be availed by anyone who doesn’t itemize their deductions. When it comes to the 2025 tax year, the standard deduction is $13,850 for individual filers with single marital status and $27,700 for married couples filing altogether. This amount is 20,800 for heads of households. Most taxpayers can benefit from these deductions as it normalizes this process a lot.
Taxed income is more than your job salary.
The main source of taxable income is the salary or wage of an employee. There are also other sources that not many people realize are taxable. This includes things like a freelance job, side hustle, rent income, etc. If you fail to report all your sources, it can result in serious penalties, audits, and interests as well.
Deductions incorporate more than mortgage interest.
When people think of mortgage interest, all they think about are the tax deductions. Deductions include more than just mortgage interest. This includes things like medical costs, student loans, charity donations, and business costs for self-employed persons as well. There are quite rare deductions like state and local taxes, real estate property taxes, and unpaid employee expenses, too. You can contact your tax professional for earned income tax credits and other things related to filing taxes.
People who earn below a certain amount aren’t required to file.
For employees whose wages or salaries are below the minimum filing requirement of the IRS, you might not be eligible for filing a tax return. For the 2025 tax season, that limit is $12,400 for single taxpayers under the age of 65 and $24,800 for married couples. Even though those are not required to file at all, they might still be eligible for tax credits. Therefore, it is a win-win situation if you are worried about filing your taxes; you don’t have to.
Tax Credits are worth more than deductions.
Tax credits can minimize the taxes you owe, like the minimization, which reduces your overall taxable income. For instance, the Child Tax Credit facilitates you with up to $2000 per child if your child is qualified for the child tax credit, which provides a better credit for low-moderate income workers. Therefore, tax credits are considered more significant and valuable than deductions as they directly minimize your tax liability.
The tax return can be revised if a mistake has been made.
For those who make an error while filing their tax return, they can revise their tax return by using the IRS form 1040-X. This provides you a chance to correct your mistakes and also claim any deductions or credits you missed while filing the first time. You must, however, also amend your return within a period of 3 years from the initial filing date in order to receive a refund.
Refund isn’t assured.
Many people are expecting a refund, but only a few get it. For those who owe more taxes than those that have been withdrawn, you need to pay the difference as well. Also, for those who haven’t had taxes withheld from their pay slip, you can end up owning more money.
Freelancing individuals are taxable.
For those having a side hustle or a freelancing business, they are also required to report their income, no matter the amount. Freelancer normally anticipates a 1099 form from their clients who have paid them an amount of $600 or more. But even if you don’t receive this form, it is still taxable. You are eligible to subtract this business cost, just like office equipment and travel, to balance this income.
Tax implications for the selling of investments
For the selling of investments like stocks, real estate, and bonds, you might be subject to capital tax gains. The tax amount is dependent upon the duration for which you have held the asset in your possession. Short-term capital gains are taxed as ordinary income, while long-term capital gains are normally taxed at a lower rate.
The deduction of student interest loan
For those adults paying student interest loans, they can be eligible for deductions up to $2500 annually. This deduction can be availed for those also who haven’t itemized deduction or are eliminated due to high-income earnings. Make sure to keep track of your student loan deposits throughout the year.
IRS never communicates by Email or Phone
There are a lot of tax scams prevailing in the market. The Internal Revenue Service never communicates with people by calls or emails and asks you for payment on an immediate basis. These are scammers impersonating themselves as IRS agents and attempting to steal your valuable information and money. Furthermore, you should always verify any communication you have with the IRS and don’t reveal any valuable information to people impersonating themselves as IRS agents on calls.
Forget about home office costs.
This means that people who are self-employed are eligible for home office subtraction/deduction. This allows home office owners to get a deduction from a part of their rent, mortgage, and utility bills. You are eligible for this deduction even if you work part-time from home.
Using tax accounting software
Tax software is one of the most important tools if you know how to use it. These are tools that can allow you to estimate and calculate your subtractions and credits and find your tax liability as well. This minimizes the risk of human errors that are present in manual filing.
You are eligible for a refund even if you don’t have any kids.
Many people believe that tax refunds are for those who have kids. The Internal Revenue Service provides tax credits and subtractions to everyone with or without a family. For instance, the Earned Income Tax is for individuals and families with low and moderate incomes, which has no relation to having any children.
Self-employed have to pay income and self-employment taxes.
Self-employed individuals have to pay both income taxes and self-employment taxes as well. This includes social security and medical care contributions as well. Keep in mind that this is separate from your average income tax. You have to subtract a part of your self-employment taxes, which can assist you in minimizing the overall taxable wage.
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