Navigating the 2025 Tax Season; What You Need to Know

2025-03-02

The 2025 tax filing season has begun, with the IRS processing millions of returns and issuing refunds. However, delays and changes in the tax landscape are causing uncertainty for many taxpayers. Here’s what you need to know about tracking your refund and navigating this year’s tax season.

The IRS started accepting tax returns on January 27, 2025, and expects to process over 140 million individual returns by the April 15 deadline. Most refunds are issued within 21 days of filing, especially for those who file electronically and opt for direct deposit. However, refunds tied to the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (CTC) may face delays until early March due to fraud prevention measures under the PATH Act of 2015.

Taxpayers can track their refund status using the IRS’s online tool, which updates approximately 24 hours after e-filing. To use the tool, filers need their exact refund amount and filing details. The tool provides updates on three stages: return received, refund approved, and refund sent.

This year, the IRS has expanded its free Direct File program to 25 states, allowing individuals with straightforward tax situations to file online at no cost. However, the program excludes gig workers, rental income, and single filers earning over $200,000. Despite its expansion, concerns about IRS staffing and funding persist. Recent layoffs and budget cuts have raised fears of potential delays, particularly during peak filing season.

The average federal refund so far this season is $2,065, up 18.6% from the same period last year. However, fewer taxpayers are filing early, with the IRS reporting a 7.7% drop in returns received compared to 2024. Factors contributing to this slowdown include confusion over tax law changes, an influx of 1099-K forms for gig workers, and misinformation on social media suggesting that tax obligations might disappear under new policies.

Taxpayers in disaster-affected areas, such as parts of California and the Southeast, have extended deadlines until May 1. Meanwhile, the IRS continues to encourage electronic filing and direct deposit to expedite refunds. Despite challenges, the agency remains committed to processing returns efficiently, though delays may persist for those claiming certain credits or filing paper returns.

For those awaiting refunds, patience is key. The IRS advises checking the status of your refund online and ensuring all required documents are submitted accurately to avoid further delays.

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