IRS Announcement – Major Tax Changes Coming in 2025, Affecting Millions of Americans

The IRS Announcement has details regarding the significant tax change that will occur in 2025 among the people of America. It will update tax codes and programs and make it easy for citizens to receive benefits without much trouble.

These changes will be in monthly or one-time payment benefits distributed among citizens to enable them to deal with the high inflationary rates. The residents who survive based on the government program must know about the declaration and the significant changes the department has made.

IRS Announcement

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The United States government has given various payment programs that work for low-income and financially unstable citizens. Recently, the IRS announcement has been made by its department that confirms that multiple changes are coming for the taxpayers in the country’s taxation system.

At this point, over 128 million individual tax returns would have been processed through this department, which helps understand the details regarding payments and distribution among citizens. But these changes shall apply only after 1st January 2025.

These will ensure that the alteration helps taxpayers follow up on their necessities. It will also help the government balance the distribution of funds and maintain the funds for future use.

IRS Announcements Overview

The Implementation of Direct File

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2024 Direct File Availability –

• Available to residents of 12 states: Arizona/ California/ Florida/ Massachusetts/ Nevada/ New Hampshire/ New York/ South Dakota/ Tennessee/ Texas/ Washington State/ Wyoming.
• The direct file was available only to those citizens who were working and residing in these states by 2023.

2025 Program Expansion –

• Expanding to 12 additional states for 24 states: Alaska/ Connecticut/ Idaho/ Kansas/ Maine/ Maryland/ New Jersey/ New Mexico/ North Carolina/ Oregon/ Pennsylvania/ Wisconsin.
• Must have resided and worked in these states throughout 2024.

Usage and Impact –

• One hundred forty thousand taxpayers used the free service for their easy federal tax returns in 2024.
• Connected the users to their state’s free tax filing tools and completed the process.
• This program will be doubled in states for 2025; therefore, many more taxpayers are expected to benefit.

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Statement of IRS Commissioner –

• Danny Werfel highlighted the aim of providing an improved tax filing experience.
• Focus: Helping taxpayers fulfill their obligations quickly and easily.

Future Goals –

• Increase participation across more states annually.
• Roll out new functionalities for even greater inclusiveness and accessibility.

2025 IRS Tax Changes

The changes affecting the 2026 tax year have been announced early to allow taxpayers to be prepared and adjust to these new rules. These updates are material for planning, especially for standard deductions and alternative minimum tax (AMT) exemptions.

• The standard deduction is $15,000 for single taxpayers and married individuals who file separately. This is $400 more than in the tax year 2024.
• The standard deduction jumps to $30,000 for married couples filing jointly, from $800 higher than for 2024.
• Heads of households get a rise to $22,500, an increase of $600 over 2024.
• Another significant change relates to the alternative minimum tax, or AMT, exemption amounts for 2025.
• Unmarried individuals’ exemption shoots up to $88,100, with the threshold at which it starts phasing out at $626,350.
• The exemption bumps up to $68,650 for married individuals filing separately.
• The exemption amount for married couples filing jointly is $137,000, and a phase-out starts at $1,252,700.

The full list of changes is available o taxpayers on the IRS’s website.

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