As the tax deadline approaches, many Americans are scrambling to finalize their tax returns. With state and federal income taxes due on Tuesday, April 15, 2025, taxpayers are urged to gather all necessary documents and consider their filing options.
Taxpayers should collect statements from employers, banks, stockbrokers, and other financial institutions to accurately report their income. Among the most crucial documents is the W-2 form, which employers are required to send out by January 31, or the next business day if that date falls on a weekend. Additionally, companies have until mid-February to send tax forms disclosing other sources of income, such as 1099-B and 1099-MISC forms.
For self-employed individuals, the 1099 forms are essential. If a company paid an independent contractor or freelancer $600 or more during the past year, they must provide a 1099-NEC form. Furthermore, for gig workers or those operating online businesses, a 1099-K form may be issued if payments exceed certain thresholds. Starting in 2024, companies are required to issue 1099-K forms to individuals who received more than $5,000 in total payments, and beginning in 2026, these forms will be mandatory for total payments of $600 or more.
Taxpayers who find themselves unprepared to file by the deadline have options. Individuals and sole proprietors can file Form 4868 to receive an automatic six-month extension for their Form 1040. C-Corporations and LLCs can file Form 7004 to extend the deadline for Form 1120 by an additional six months, while estates and trusts can use the same form for a five-and-a-half-month extension for Form 1041. However, these extension forms must be submitted by midnight on April 15, 2025.
For those who may be overwhelmed by the filing process, the IRS provides resources such as the Free File program. This guided software, available since January 10, 2025, is offered through a public-private partnership with various companies, allowing taxpayers to file their taxes online for free. Taxpayers can select from eight trusted partners listed on the IRS website.
As taxpayers navigate the filing process, they may encounter challenges reaching the IRS for assistance. Reports indicate that many taxpayers are finding it increasingly difficult to get through to the IRS by phone this tax season. Legal experts warn that this issue may worsen in the coming years due to staffing cuts that could reduce the IRS workforce by nearly half.
IRS employees involved in the 2025 tax season were not permitted to accept buyout offers until after the April 15 filing deadline. Earlier this month, the IRS began layoffs that could reduce its total workforce by up to 25%, affecting approximately 20,000 staff members. The IRS has already laid off around 7,000 probationary workers who were recently ordered to be reinstated by a federal judge.
Despite the staffing challenges, tax return processing times have remained relatively consistent compared to last year. By the first week of April 2025, 101.4 million returns had been processed, slightly down from 101.8 million in the same period of 2024. Refunds have increased, with 67.7 million issued this year, compared to 66.7 million in 2024. However, experts express concern that the 2026 filing season could be adversely affected by the loss of thousands of tax collection workers.
Eric Santos, executive director of the Georgia Tax Clinic, emphasized the strain on IRS employees, stating, “The work is getting spread across fewer and fewer people.” As the filing deadline approaches, taxpayers are reminded of the importance of timely submissions to avoid penalties.
For those who have already completed their returns, congratulations! For those still working on them, the IRS offers a searchable FAQ page with nearly 60 questions and answers to assist taxpayers. The IRS also provides last-minute tips for those eligible for automatic extensions or struggling to pay their tax bills.
As the tax filing deadline looms, it’s crucial for taxpayers to stay informed about their filing options and the resources available to them. With proper preparation and the right tools, filing taxes can be made easier, even in these challenging times.
