Federal Tax News for Individuals: May 2025

Need to File an Amended Return?

You filed your tax return and breathed a sigh of relief. Then you realize that you forgot to include something important. In general, you can file an amended return and claim a refund within three years after your original return is filed, or two years after paying the taxes, whichever is later. So, if you filed your 2024 tax return and paid the taxes owed on April 1, 2025, you have until April 1, 2028 to amend the return. Math errors might not require filing an amended return, as the IRS may catch and correct such mistakes. However, do file an amendment if there's a change in filing status, income, deductions, credits or tax liability. Click here for a list of related FAQs.

Tax Duties of U.S. Citizens Abroad

Taxpayers living and working abroad have until June 16, 2025, to file their 2024 income tax returns and pay any tax due. This deadline applies to U.S. citizens and resident aliens, including those with dual citizenship. It includes those in the military on duty outside the United States. These individuals generally are allowed a two-month extension from the usual deadline to file without having to request it. Even with the extension, interest will apply to any 2024 tax payments received after April 15. This means that beginning after April 15, unpaid 2024 tax balances will begin accruing interest, currently 7% per year, compounded daily. For more from the IRS click here.

When Your Refund Is Stolen…

What can you do if your tax refund is stolen? According to the IRS National Taxpayer Advocate (NTA), this happens to tens of thousands of taxpayers each year. The NTA offers steps to take and warns that recovering a stolen refund is a slow process. If you were expecting your refund by direct deposit and it was improperly diverted to another account, you must wait 26 days from the date the IRS received your tax return to contact the agency. If you were expecting a paper refund check, you must wait six weeks from the date the refund was issued. After the waiting time, file IRS Form 3911 (Taxpayer Statement Regarding Refund) to request a refund trace. Click here for more details.

Savings Accounts for Those with Disabilities

Eligible individuals with disabilities and their family members can use Achieving a Better Life Experience (ABLE) accounts to pay for qualified expenses. These are savings accounts that don't affect eligibility for government assistance programs. The 2025 contribution limit is $19,000. Qualified expenses include housing, education, transportation and basic living expenses.

ABLE account beneficiaries may be eligible to claim the Saver's Credit for a percentage of their contributions. This is a nonrefundable credit for people who are 18 or older, aren't dependents or full-time students, and meet certain income requirements. Contact us for more information or click here for more information.

Crime Doesn't Pay

While most taxpayers strive to file honest tax returns, some try to defraud the government. In one case, a Miami man pleaded guilty to hiding more than $20 million in Swiss bank accounts for decades. In the complex case, the IRS uncovered many false statements and claims the taxpayer made to evade detection. Upon learning that Switzerland had agreed to provide the IRS with documentation of his dealings, the man applied to participate in the IRS voluntary disclosure practice. This practice allows noncompliant taxpayers to get on a path to resolve their issues. However, the IRS found that the taxpayer's application contained numerous false statements. He now faces up to five years in prison.