The 2025 tax season is underway, but it’s best to prepare before you start to file. Not only will the process be easier, you’ll also be ready to navigate potential changes from last year. That’s because a new tax law has implemented several updates that could impact your federal return.
Get tips and guidance on how to simplify the tax filing process, but before we dive into the details, it’s important to note that tax laws vary from state to state and between individual situations. For specific questions or concerns about filing taxes, it’s best to consult a trusted accountant or tax professional.
In This Article
Check for relevant tax law updates
In July 2025, the One Big Beautiful Bill Act was signed into law. The act made some temporary tax provisions become permanent and also included new changes for individual tax payers. Some of the changes include:
- Larger standard deduction
- Larger child tax credit
- Deductions for tips and overtime
- Car loan interest deduction (temporary)
- Senior tax deduction (temporary)
Choose how to file
Next, you need to decide how to file your taxes. There are three options to consider.
IRS Free File
If your tax situation is straightforward and you meet the eligibility requirements, consider using IRS Free File. As the name implies, there’s no cost to this program and you get guided tax preparation software. This public-private partnership between the IRS and the tax preparation software industry provides brand-name tax filing products for free to qualifying taxpayers with an adjusted gross income (AGI) of $89,000 or less.
If your income exceeds the maximum AGI but you still have a simple tax situation, you can use the IRS’s fillable forms for free.
Tax Software
Another option is to pay for tax software or an app. They’re typically more affordable than a professional preparer and you can also use them to file your state tax return in addition to your federal return.
If questions arise, you may be able to pay extra to access help from a tax professional without having to pay the full price to have someone prepare your return for you.
Professional Help
If you have a complicated tax scenario, a professional may help maximize your refund and minimize your frustration. Major changes like getting married or divorce, having a child, or cashing out a 401(k) could warrant getting professional help with your tax preparation.
Gather documents before filing
Whether you prepare your own tax return or hire someone to help, you’ll need to compile information and documents to fill out the forms. Here are the main types of documents you’ll need, although specifics can vary based on your personal situation.
Personal details
First, the IRS will need identifying information to process your return.
- Social security number or tax ID number you, spouse, and any dependents
- Bank information if you want to receive a refund by direct deposit or pay your tax balance
- Current address
- Self-select PIN if you e-filed the previous year
- IP PIN, if you have one from the IRS
Income sources
Next, you need to gather all forms of income you had for the relevant tax year. This could include any of the following:
- W-2 form for employment
- 1099-K for online marketplace payments
- 1099-G for unemployment benefits or other government payments
- 1099-INT for bank interest
- 1099-DIV for dividends or distributions
- 1099-NEC for freelance or gig work
- 1099-R for retirement distributions
- SSA-1099 for Social Security payments
Credits and deductions
Some credits and deductions may need documentation. Common records include:
- Childcare expenses
- Mortgage and property tax records for itemizing deductions
- Charitable contributions
- Contributions to Health savings account (HSA) or flexible spending account (FSA)
- Contributions to eligible retirement plans
- Education expenses for students or teachers
This list of documentation is just a starting point. Other information may be requested depending on your circumstances.
Consider last-minute retirement plan contributions
If you haven’t maxed out your retirement plan contribution yet and have extra savings, a last-minute deduction may lower your taxable income and reduce your yearly taxes.
You can contribute up to $7,000 to an IRA for tax year 2025 until April 15, 2026. If you’re 50 or older, you can contribute a total of $8,000.
In 2026, the IRA contribution limit is $7,500 with an extra $1,100 for those 50 and older as catch-up contributions.
Be mindful of tax scams
It’s important to be aware of tax scams when filing taxes. Remember that you sign your returns under penalty of perjury. Even if you work with a tax professional, you’re responsible for any incorrect or misleading information, whether a mistake or fraud. Therefore, ensure that you hire a reputable and credentialed tax preparation professional.
Moreover, be cautious of telephone calls demanding money, texts, or emails claiming to be from the IRS. The IRS doesn’t initiate communication with taxpayers via email, text, or social media regarding any tax-related issues, including bills and refunds. These are often attempts to scam you.
Need more time?
If you need more time to file your taxes, you can apply for an extension by April 15, 2026. Typically, you can receive an extension of up to six months to prepare your taxes. However, even with an extension, taxes must be paid by the April deadline.
File your taxes
Filing taxes doesn’t have to be a hassle if you properly prepare and have all your documents in order. Whether you use a professional tax preparer or do it yourself, keep our tips in mind, and you’ll have your taxes done in no time!
Prosper does not provide tax advice. You should consult your own financial advisor.
Written by Lauren Ward
Lauren Ward is a personal finance writer who is passionate about helping people simplify their financial decisions. Her work has been featured in outlets such as USA Today Blueprint, CNN Underscored, and many more. She lives in Virginia with her husband and three children.