03 Jul WHAT’S NEW WITH THE IRS IN 2025: KEY UPDATES EVERY TAXPAYER SHOULD KNOW
🔍 What’s New with the IRS in 2025: Key Updates Every Taxpayer Should Know
As we move through 2025, the IRS continues to roll out significant updates affecting both individuals and businesses. From increased enforcement to new reporting requirements, it’s more important than ever to stay informed and compliant.
Here’s a roundup of the most relevant IRS changes and developments our clients need to know right now:
1. IRS Enforcement Is Stepping Up
Backed by increased funding through the Inflation Reduction Act, the IRS is ramping up audits and enforcement—especially for high-income earners and large businesses.
What to expect:
- More audits for filers earning over $400,000
- Scrutiny of partnerships and S-corps
- Enhanced digital tracking of cryptocurrency and foreign assets
🔹 CPA Tip: Now is the time to tighten your bookkeeping and ensure all income sources are accurately reported.
2. Beneficial Ownership Reporting Is Now Required
Starting in 2024, and continuing into 2025, small businesses and LLCs are required to report their beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) under the Corporate Transparency Act.
Who must file:
- Most small corporations, LLCs, and similar entities
- Exemptions apply (e.g., large operating companies, nonprofits)
Deadlines:
- Entities formed before Jan 1, 2024 must file by Jan 1, 2025
- Entities formed in 2024 have 90 days
- Entities formed in 2025 and beyond will have 30 days
Failure to file could result in steep penalties—up to $500 per day.
🔹 CPA Tip: If your business hasn’t filed yet, we can help you prepare and submit your report correctly and on time.
3. Clean Vehicle and Energy Credits Continue to Evolve
As of 2025, the IRS has further clarified rules for claiming clean energy and electric vehicle (EV) tax credits:
EV Credit Highlights:
- Up to $7,500 available for eligible new vehicles
- Must meet domestic assembly and battery sourcing requirements
- Income caps apply (e.g., $150,000 for single filers)
Home Energy Credits:
- Up to 30% credit for qualifying energy-efficient home improvements
- Annual limits apply per upgrade type (e.g., heat pumps, insulation)
🔹 CPA Tip: If you’re considering buying an EV or upgrading your home, we can assess whether you qualify and help maximize the credits.
4. IRS Digital Services Expansion
The IRS is actively expanding digital services through its “Paperless Processing Initiative”:
- More forms can now be submitted and amended online
- Faster refunds for electronically filed documents
- Secure online accounts for both individuals and tax professionals
🔹 CPA Tip: If you haven’t set up your IRS online account, do it now—it can simplify transcript requests, payment tracking, and more.
5. Interest Rates and Underpayment Penalties Remain High
Due to persistent inflation and higher borrowing costs, the IRS interest rate for underpayments remains elevated in 2025:
- 8% annually (compounded daily) for individuals as of Q3 2025
This means failing to make proper estimated payments or underreporting income can cost you more than ever.
🔹 CPA Tip: If you’re self-employed or have investment income, review your estimated tax payments now to avoid penalties later.
Final Thoughts
The tax landscape is changing fast in 2025. Whether you’re a small business owner, investor, or everyday taxpayer, staying ahead of these IRS updates is crucial. At Gates, Kirby & Company, we’re here to make sense of these changes and ensure you stay compliant while maximizing every possible benefit.