Tax Questions? We Have Your Tax Questions Answered.
The most common U.S. tax questions, answered clearly and completely that’s easy to understand.
FAQ: Tax Questions Answered:
What is the deadline to file my federal tax return?
The standard federal income tax filing deadline is April 15. If that date falls on a weekend or holiday, the deadline shifts to the next business day. You can file Form 4868 by April 15 to get an automatic six month extension to file, moving your filing deadline to October 15, but this does not extend the deadline to pay taxes owed. Late payment penalties and interest begin accruing after April 15 regardless of any extension you file.
How much income do I need to earn before I have to file taxes?
For tax year 2025 (the return most people are filing in 2026), single filers under 65 must file if their gross income exceeds $15,750, and married couples filing jointly under 65 must file if their combined income exceeds $31,500. Head of household filers under 65 must file above $23,625. Self employed individuals must file if net self employment income is $400 or more, regardless of other income. These thresholds rise for filers 65 or older.
What is the 2025 standard deduction for the current tax year?
The 2025 standard deduction is $15,750 for single filers and married filing separately. It’s $31,500 for married filing jointly, and $23,625 for head of household. These amounts increase again for tax year 2026, to $16,100, $32,200, and $24,150 respectively. The deduction rose more than a typical inflation adjustment for 2025 because of the One Big Beautiful Bill Act (OBBBA). About 90 percent of taxpayers take the standard deduction because it is larger than their itemized deductions.
What is the One Big Beautiful Bill Act and how does it affect my taxes?
The One Big Beautiful Bill Act (OBBBA), signed into law July 4, 2025, made most individual provisions of the 2017 Tax Cuts and Jobs Act permanent and added several new tax breaks. It raised the standard deduction for 2025 beyond the usual inflation adjustment, added a new temporary $6,000 bonus deduction for taxpayers age 65 and older, and introduced new temporary deductions for qualified tips, qualified overtime pay, and interest on certain car loans.
How does freelance income get taxed differently than W-2 income?
Freelancers and self employed individuals pay both the employee and employer portions of Social Security and Medicare taxes, totaling 15.3 percent of net earnings (self employment tax). W-2 employees only pay half of this. Self employed workers can deduct half of their self employment tax from gross income. Freelancers must also make quarterly estimated tax payments. See our small business tax resources for the quarterly payment schedule.
What is the self employment tax home office deduction, and who qualifies?
For self employment tax, the home office deduction lets self employed individuals deduct a portion of home expenses based on square footage used exclusively and regularly for business. W-2 employees do not qualify for this deduction under current law. For self employed people, the simplified method for self employment tax allows $5 per square foot up to 300 square feet, for a maximum deduction of $1,500.
What should I do if I receive an IRS notice or letter?
Do not ignore an IRS notice. Read it carefully; most notices request additional information, propose a change to your return, or inform you of a balance owed, and are not audit summons. Note the response deadline, gather any relevant documentation, and respond in writing if required. Never call the IRS about a notice without reading it first.
How long should I keep my tax records?
The IRS recommends keeping tax records for at least three years from the filing date, the general statute of limitations for audits. Keep records for six years if you underreported income by more than 25 percent, and indefinitely if you filed a fraudulent return or never filed at all.
With Crypto tax reporting, do I have to pay taxes on cryptocurrency gains?
Yes. The IRS treats cryptocurrency as property, not currency, so every taxable event triggers a capital gain or loss that must be reported. With Crypto tax, short term gains are taxed as ordinary income; long term gains qualify for lower capital gains rates of 0, 15, or 20 percent depending on your income. See our investment and crypto tax resources for reporting details.
What is an Offer in Compromise and do I qualify?
An Offer in Compromise (OIC) is an IRS program that lets qualifying taxpayers settle their tax debt for less than the full amount owed. You generally qualify if your reasonable collection potential is less than what you owe. The IRS accepts roughly 40 percent of OIC applications.
What is the best way to reduce my taxable income legally?
The most effective legal strategies include maximizing pretax retirement contributions (the 401(k) employee deferral limit is $23,500 for 2025 and $24,500 for 2026), contributing to an HSA if eligible, deferring income when possible, and, if self employed, taking full advantage of the Qualified Business Income (QBI) deduction and Section 179 depreciation.
Can I deduct my vehicle expenses for business use?
Yes, if you use your personal vehicle for business purposes. The IRS standard mileage rate for business use was 70 cents per mile for 2025. For 2026, the rate started at 72.5 cents per mile, but the IRS made a rare mid year adjustment in July, raising it to 76 cents per mile for miles driven from July 1 through December 31, 2026. If you drove for business in both halves of 2026, your mileage log needs a subtotal for each period since the two rates do not apply retroactively. You cannot deduct commuting miles between your home and regular workplace.
What is tax loss harvesting and should I use it?
Tax loss harvesting is selling investments at a loss to offset capital gains realized elsewhere in your portfolio. You can offset capital gains dollar for dollar with capital losses, and if losses exceed gains, deduct up to $3,000 against ordinary income per year. Be aware of the wash sale rule, which disallows the deduction if you buy the same or a substantially identical security within 30 days before or after the sale.
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