How to do your taxes in the time of DOGE
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How to do your taxes in the time of DOGE
Changes may be happening to the government at lightning speed, but come April, tax season will still be in full swing. And this year, it might be advisable to file early. At the moment, the government has until March 14 to avoid a shutdown, while President Trump and Elon Musk are continuing their mass layoffs of federal workers.
This could very well lead to delays in getting your refund. Chye-Ching Huang, executive director of NYU’s Tax Law Center, predicted that federal government layoffs “will hurt everyday Americans who pay their taxes and count on the IRS to pay refunds on time while encouraging wealthy people and large businesses to cheat on their taxes.”
Yet, even as this tax season seems particularly topsy-turvy, it’s still worth doing your homework to understand what’s the same and what’s different this year, in an effort to make 2025 "your" year financially.
Here are a few things to keep in mind:
Make sure your personal data is safe from DOGE
Filing taxes inherently means turning over personal data to the government. While as of yet, DOGE doesn’t have access to the IRS, Musk is pushing for access to the IRS’s databases.
In a recent article, Fast Company personal finance writer Emily Guy Birken shared tips on protecting your personal information and finances. This included freezing your credit, and opening accounts at my Social Security and IRS.gov to prevent fraudsters from accessing your tax benefits.
Decide to DIY or hire out
Paying taxes is already painful enough, but doing them requires choosing between time (filing them yourself) and money (paying someone else to file them). If you work for one employer and are taking a standard deduction, your taxes are probably straightforward enough that it’s worth filing them yourself. And if you earn $84,000 or less, you may qualify to use the IRS's online Free File program.
However, if you work for yourself or have gone through a major life change last year—such as getting married (or divorced) or adding a new family member, selling a major asset such as a house or stock, or having moved to a different state—it might be worth the several-hundred dollars to pay a CPA to make sure you minimize errors and maximize your refund.
Get up to speed on which deduction is best for you
Taxpayers can choose between the standard deduction and itemizing deductions. The former is a lump sum that is deducted from taxable income, the latter requires itemizing expenses, which are then deducted from taxable income. In 2017, Trump nearly doubled the standard deduction, making it the better option for most taxpayers. For the current tax year, the standard deduction is $14,600 for single people, and $29,200 for married couples filing jointly.
Understand the 1099-K
Roughly one-third of Americans are gig workers, freelancers, or independent contractors. If you’re one of them, heads up: You might be getting a 1099-K form this year. The 1099-K is used to report payments received through third-party platforms, such as eBay, Uber or Lyft, Etsy, and Venmo.
Though the 1099-K has been around since 2012, it used to be for only those who earned $20,000 or more and had 200 or more transactions. This year, if you made $5,000 or more on third-party platforms, you’ll receive a 1099-K. Before starting your returns, review your 1099-K to make sure it doesn’t include nontaxable payments such as Venmo transactions from friends and family, or items you sold at a loss. If there is nontaxable income included on your 1099-K, the IRS has added a space on the Schedule 1 form where you can report all the nontaxable income.
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