Encompass Credit Union's Tips for Tax Season in 2025
Navigating tax season can feel overwhelming, but at Encompass Credit Union, we're here to provide clarity and support for our members in Indiana. As we look ahead to filing taxes in 2025, there are a few key points to keep in mind, as well as some practical tax tips to simplify the process.
Notable changes for tax year 2024
Standard Deductions Increased:
Single: $14,600
Head of Household: $21,900
Married (Joint): $29,200
Child Tax Credit (CTC):
$2,000 per child
Phase-out starts at $200,000 AGI (single) or $400,000 (joint).
Child must be under 17
Earned Income Tax Credit (EITC) Age Change: Must be 25-64 years old (without qualifying child)
Adoption Credit:
$16,810 per child
Phase-out starts at $252,150 AGI
Clean Vehicle Credit: Available for new and used vehicles
Practical Tips for a Smooth Tax Season:
Organize Your Documents Early: Don't wait until the last minute to organize your documents. Gather all necessary documents, including W-2s, 1099s, receipts, and records of charitable contributions. A well-organized system will save you time and reduce stress.
Explore Available Deductions and Credits: Take the time to understand the various deductions and credits you may be eligible for. These can significantly reduce your tax liability. Consider deductions for education expenses, medical costs, or contributions to retirement accounts.
Utilize Digital Tools: Many online platforms and software programs can assist with tax preparation. These tools often provide step-by-step guidance and help identify potential errors.
Review Your Withholding: Ensure your current withholding aligns with your tax obligations. Adjust your withholding accordingly if you received a large refund or owed a significant amount last year.
Consider Professional Assistance: If your tax situation is complex, don't hesitate to seek help from a qualified tax professional. They can offer personalized advice and ensure you take advantage of all available benefits.
Frequently Asked Questions:
Q: What documents should I keep for my tax records?
A: Retain all supporting documentation for at least three years from the date you filed your original return or two years from the date you paid the tax, whichever is later. This includes W-2s, 1099s, receipts, and bank statements.
Q: How do I check the status of my tax refund?
A: You can check the status of your tax refund using the IRS "Where's My Refund?" tool. This is available on the IRS website.
Q: I'm self-employed. What are some specific things I should keep in mind?
A: Self-employed individuals should meticulously track all income and expenses. To avoid penalties, consider making estimated tax payments quarterly. Keep detailed records of business-related expenses and explore available deductions for self-employment taxes.
Q: Where can I find reliable information about Indiana state taxes?
A: The Indiana Department of Revenue website provides comprehensive information about state tax laws and regulations.
Remember, the federal tax deadline for most taxpayers is April 15, 2025. We recommend regularly checking the IRS website for updates and announcements.
Navigating tax season can be complex, but with the right information and preparation, you can make the process more manageable.
Have questions about financial planning for tax season?