Your Guide to Tax Season 2025 

As we’ve stepped into the new year, tax season is officially upon us. Whether you’re an individual taxpayer or a business owner, preparing for your 2025 tax returns early can help you avoid unnecessary stress, penalties, and missed opportunities for savings. This guide outlines key considerations for tax filing, important deadlines, and crucial details about the FBAR (Foreign Bank Account Report).

1. Who Is Considered a Tax Resident in the U.S.?

Understanding if you are a tax resident is crucial for determining your filing obligations in the United States. You are considered a U.S. tax resident if you meet either of the following criteria:

1. Green Card Test: You are a lawful permanent resident of the U.S. at any time during the year. Holding a green card means you are subject to U.S. taxation on your worldwide income, regardless of where you live or work.
2. US Citizens: as a citizen, you are also subject to U.S. taxation on your worldwide income, regardless of where you live or work.
3. Substantial Presence Test: You are physically present in the U.S. for at least 31 days in the current year and 183 days over the past three years, calculated as:

• All the days you were present in the current year,
• 1/3 of the days you were present in the year before that,
• 1/6 of the days you were present in the second year before that.

Exceptions apply for certain visa holders, diplomats, and others with specific exemptions. Even if you don’t qualify as a tax resident, non-residents may still have U.S. tax filing obligations on income earned within the country.

Understanding your residency status ensures compliance with U.S. tax laws and helps you avoid unnecessary penalties or missed filing requirements.

2. What to Consider for Your Tax Return

For Individuals

• Gather Your Documents: Compile W-2s, 1099s, investment income statements, and any receipts for deductions or credits you plan to claim.
• Maximize Deductions and Credits: Look into education credits, child tax credits, retirement contributions, and deductions for mortgage interest or charitable contributions.
• Review Your Filing Status: Changes in your family situation – such as marriage, divorce, or having children – could impact your tax bracket or available credits.
• Foreign Income Considerations: If you earned income abroad or have financial accounts overseas, you may need to file additional forms such as Form 2555 (Foreign Earned Income Exclusion) or report foreign accounts on the FBAR (see below for details).

For Businesses

• Organize Financial Records: Review income, expenses, payroll records, and deductions for business expenses like office supplies, travel, or software subscriptions.
• Stay Updated on Tax Changes: 2024 may have introduced new tax laws or adjustments to corporate tax rates and deductions – make sure you’re informed.
• Estimated Taxes: Confirm that your quarterly tax payments have been sufficient to avoid penalties.
• Employee-Related Compliance: Ensure that proper tax withholding for employees has been done and prepare forms like W-2s and 1099s.

3. Important Dates to Keep in Mind

• January 15, 2025: Final estimated tax payment for 2024 (if applicable).
• January 15, 2025: IRS starts accepting business tax returns 
• January 31, 2025: Deadline for employers to distribute W-2s and 1099-NECs to employees and contractors.
• Early February, 2025: IRS starts accepting e-filed tax returns 
• March 17, 2025: S Corporations and partnerships must file their returns or request an extension. (March 15 falls on a weekend, so the deadline shifts to the next business day.)
• April 15, 2025: Individual and corporate tax returns due (unless you file for an extension).
• June 17, 2025: Deadline for the second quarterly estimated tax payment.
• October 15, 2025: Final deadline to file 2024 tax returns if an extension was granted.

4. Understanding the FBAR: Foreign Bank Account Report

The FBAR – or FinCEN Form 114 – is an essential filing requirement for U.S. taxpayers with foreign financial accounts.

Who Needs to File FBAR?

• Any U.S. tax resident, including citizens, residents, or entities like corporations and partnerships, must file an FBAR if they have financial interest or signature authority over foreign accounts with a combined value exceeding $10,000 at any point in 2024.
• Foreign accounts may include bank accounts, brokerage accounts, and even pension funds or insurance policies with a cash value.

Why Is FBAR Important?

The FBAR helps the U.S. government track offshore assets to prevent tax evasion. It is filed separately from your tax return with the Financial Crimes Enforcement Network (FinCEN) and has strict compliance requirements.

What Are the Penalties for Noncompliance?

Failing to file the FBAR or reporting incomplete information can lead to severe penalties:

• Non-Willful Violations: Up to $10,000 per violation.
• Willful Violations: Penalties are the greater of $100,000 or 50% of the account balance, and criminal charges may also apply.

Prepare Now for a Stress-Free Filing Season

Proactively organizing your documents and understanding your obligations will make tax season more manageable and help you avoid costly mistakes. Whether you’re navigating personal taxes or managing business filings, preparation is the key to compliance and financial peace of mind.

Have questions about your 2025 tax obligations or FBAR filing? Contact us today for tailored solutions and expert support to make this tax season hassle-free.