What Tax Professionals Must Know for the 2025 Tax Season

The holiday season might bring festivities, but for tax professionals, it’s also the calm before the storm. The 2025 tax season is quickly approaching, and it’s shaping up to be one of the most pivotal years for tax professionals. With shifting regulations, evolving reporting requirements, and the expiration of key tax provisions, this year will require more than just the usual preparation, it’s a time for strategic foresight. So, How can tax professionals survive this season and capitalize on the opportunities that lie ahead?

Proactive Planning is Key

As we head into 2025, early preparation is critical. The IRS has made it clear that taxpayers should start getting ready now by using tools like the IRS Online Account and practitioners must adapt to annual IRS updates and legislative changes. These tools help both professionals and taxpayers access key details such as adjusted gross income, set up payment plans, and view tax forms. The IRS’s Get Ready page offers practical tips, emphasizing early preparation to ensure a smooth tax season.

For tax professionals, it's all about reflecting on last year’s hurdles—missed deductions, missed deadlines, and client communication struggles. Learning from those mistakes now can make a big difference. With key changes on the horizon, like the potential expiration of certain provisions from the Tax Cuts and Jobs Act (TCJA), tax professionals should prepare clients for these changes coming in 2026 and beyond.

AI and Modernization

If you haven’t noticed yet, AI is changing the game when it comes to tax filing. Tools like Thomson Reuters’ CoCounsel are revolutionizing tax preparation by offering instantaneous insights and automating tedious tasks. These tools save tax pros hours on tax returns and boost accuracy. But that's not all—the IRS is stepping up its game too. With more virtual assistant tools, improved phone services, and increased funding, the IRS is set to simplify tax filing and communication. Just keep in mind, with more audits on the horizon, make sure your clients’ filings are as precise as possible.

Don’t Get Left Behind

Got clients involved in cryptocurrency, NFTs, or digital assets? Now's the time to prepare for change. Starting in 2025, Form 1099-DA will require brokers handling digital assets to report transactions accurately. Plus, the 1099-K reporting threshold is dropping to $2,500, impacting those using third-party platforms for payments. Taxpayers will have to report all digital asset transactions, including those with cryptocurrencies, stablecoins, and NFTs. Accurate record-keeping will be more important than ever. Be sure your clients are keeping solid records to avoid future issues. This is a critical compliance issue—don’t let your clients get caught off guard! For more context on the evolving landscape of digital assets and the tax implications, read “Elon Musk’s DOGE Disrupts Tax Prep Giants in Filing Fight”.

Leverage Volatility for Tax Savings

The 2025 tax season will bring challenges, but it also offers the opportunity to implement effective tax-saving strategies for your clients. Loss harvesting—selling underperforming stocks to offset gains—is one of the most powerful tools for reducing taxable income. For clients who’ve experienced market volatility, this strategy can be used to carry forward additional losses, ultimately creating a more resilient portfolio.

Also, encourage clients to maximize contributions to 401(k)s, HSAs, 529 plans, and traditional IRAs. These accounts offer great opportunities to reduce taxable income while planning for future goals. Here’s what you need to know:

• 401(k): Contribution limits are set at $23,000 ($31,000 for those 50+).
• HSA: Limits are $4,150 for self-only and $8,300 for family coverage.
• 529 Plans: These offer tax-friendly savings for educational expenses, with generous contribution limits.
• Traditional IRAs: Max contributions are $7,000 ($8,000 for those 50+).

Getting those contributions in early not only helps reduce taxable income but sets clients up for long-term objectives, whether it’s retirement or education.

Opportunity or Challenge?

The IRS continues to modernize its systems, but tax professionals should expect more rigorous compliance measures. New regulations, such as those related to digital assets, will require close attention. Taxpayers must report all digital asset transactions, from cryptocurrency to NFTs, on their 2024 returns. As new forms like 1099-DA are rolled out, ensuring that clients have the right records will be essential for maintaining compliance.

While the IRS has made strides in response times and service, there’s still room for improvement. Mark Luscombe, principal federal tax analyst at Wolters Kluwer, noted that the IRS’s modernization efforts may lead to tighter audits and increased oversight. This shift underscores the importance of precision in filing.

How to Stay Ahead of the Curve

2025 may feel stable, but it’s the calm before the storm. With expiring provisions from the Tax Cuts and Jobs Act and changes in global tax regulations, tax professionals must be prepared for a rollercoaster ahead. Starting conversations about estate planning, green energy incentives, and long-term tax strategies now will ensure your clients are ready for what's to come.

It’s also important to stay informed about potential changes in disaster relief and tax credits related to clean energy. When you incorporate these insights into your planning, you’re not just being reactive—you’re staying ahead of the curve.

This Tax Season is About Strategy, Not Just Filing

Navigating the 2025 tax season isn’t just about filing returns. It’s about strategic thinking, embracing technology, and staying informed about evolving regulations. It’s about turning challenges into opportunities and making the most of what could be the most complex tax season yet. Whether you’re adopting AI tools or implementing loss harvesting, this year is all about preparing early and thinking ahead. Let’s not just get through this season—let’s make it count. Are you ready? Stay informed and inspired—subscribe to MY CPE ONE Insights for expert insights and actionable tips delivered right to your inbox!