2025 Tax Season Starts Soon: What to Expect
Starting on Monday, January 26, Americans can file their 2025 tax returns with the IRS. But naturally, many people are more interested in the timing of their refunds.
The timeline for refunds largely hinges on how taxpayers choose to file. In fact, about 93% of people opted for electronic filing last year. Those who submitted paper returns may face longer wait times, as the IRS has to manually process those documents.
Experts, including Janet Holtzblatt from the Urban-Brookings Tax Policy Center, have raised concerns. They suggest that taxpayers should brace themselves for potential customer service issues with the IRS this season. This tough situation is partly a result of staff reductions due to last year’s government shutdown when many workers were furloughed just as tax season was gearing up.
“Given these factors, taxpayers might want to temper their expectations regarding timely responses from the IRS or fast tax refunds,” Holtzblatt noted in a blog post earlier this month.
The IRS did not respond when approached for comment.
Refund Timeline for Electronic Filers
The IRS indicates that those who file electronically usually receive their refund within about 21 days. For example, taxpayers who file Form 1040 on January 26 should expect their refunds by February 16, assuming everything goes smoothly.
Additionally, the IRS recently announced that they started reducing paper refund checks late last year. Most taxpayers will need to provide bank information to ensure they receive their refunds via direct deposit.
If you receive a notification asking, “Where’s my refund?”, the IRS notes it may take up to five days for the refund to appear in your account once it has been confirmed that a check was sent.
What If You Claim EITC or ACTC?
For those claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC), which are designed for lower to moderate-income families, delays might be even longer. The IRS is mandated by law to hold these returns for additional scrutiny to detect fraud or erroneous claims.
In fact, about a third of EITC claims are often inaccurate, sometimes due to misunderstandings about eligibility, according to the IRS. On Monday, the agency confirmed that individuals claiming the EITC or ACTC wouldn’t see their refunds until at least March 2.
Tracking Your Refund
Filers can utilize the IRS’ Refund Status tool to monitor their filing status. Typically, the IRS provides updates approximately 24 hours after e-filing.
If you filed a paper return, you may have to wait around four weeks for your status to be processed, as it takes longer for IRS employees to handle those manually compared to electronic returns.
Required Information for the IRS App
To use the IRS’ “Where Can I Get My Money Back?” app, you’ll need the following:
- Social Security Number or Individual Taxpayer ID Number (ITIN)
- Filing status (e.g., “married filing jointly”)
- Exact refund amount listed on your return
The app will provide a status update that includes:
- Return received: Indicates that your return is being processed.
- Refund approved: The IRS has approved your refund and is preparing to send it out.
- Refund sent: Your refund has been dispatched to your bank or via mail.
Estimated Refund Amounts This Year
Tax refunds can often be a significant financial boost, with average payouts around $3,200 last year, according to IRS data.
This year might be even more generous, as projections suggest refunds could increase by an additional $1,000, potentially reaching about $4,200 on average due to new policies. But, of course, there’s variability; some people will see larger refunds than others.
For example, seniors may benefit from a new $6,000 deduction, while homeowners could also claim a boosted $40,000 state and local tax credit.
