What’s New with IRS in 2025? Discover Key Tax Changes Now

"Tax letters with spilled jar of coins."

The IRS reveals several updates for the 2025 tax filing season to streamline processes and enhance taxpayer protection.

At a Glance

IRS promotes online account sign-up for easier tax management.
IP PIN advised for identity protection against fraudulent filings.
Increased emphasis on reporting all digital asset transactions.
1099-K reportable threshold reduced, affecting online sellers.

Simplify Tax Management with an IRS Online Account

The IRS recommends taxpayers establish an IRS Online Account to better manage their tax information. This tool provides access to recent tax returns, payment options, and electronic notices, streamlining many tasks that typically require paper correspondence or in-person visits. This move aims to enhance taxpayer convenience and reduce the possibility of errors during tax submissions.

This important update aligns with the IRS’s larger campaign to simplify tax filing processes while improving security measures. According to IRS Commissioner Danny Werfel, “Our focus at the IRS continues to be on making tax filing easier and more accessible for everyone.”

Identity Protection PIN: Crucial for Security

Taxpayers are urged to acquire an Identity Protection Personal Identification Number (IP PIN). This six-digit number adds an extra layer of security, preventing unauthorized individuals from filing a federal tax return using an individual’s Social Security number or Individual Taxpayer Identification Number. The best way to obtain an IP PIN is through the IRS Online Account, where additional security measures are in place.

“An IP PIN is a six-digit number that prevents someone else from filing a federal tax return using an individual’s Social Security number or Individual Taxpayer Identification Number.”

While protecting taxpayer identity is paramount, the IRS has emphasized reporting obligations as well. The threshold for Form 1099-K transactions has been slashed from $20,000 to $5,000, with intentions of further reduction to $600 in the future.

Digital Assets and Reporting Changes

The IRS underscores the necessity of reporting all digital asset transactions, including cryptocurrencies. Taxpayers must maintain comprehensive transaction records for accuracy in the 2024 tax returns. This requirement reflects the IRS’s recognition of digital transactions’ growing relevance and aims to hold taxpayers accountable for all income.

The significant changes in Form 1099-K reporting require that income from online sales exceeding $5,000 must be reported. This update calls attention to the increasing volume of goods and services sold via online marketplaces. As such, many will need to adjust record-keeping practices accordingly.