Filing season start date; disaster areas; final 2024 quarterly payment; mileage rates; research credit

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e-News for Small Business January 16, 2025

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Issue Number:  2025-01

Inside This Issue

* IRS announces Jan. 27 start to 2025 tax filing season; continues historic improvements to expand, enhance tools and filing options [ #First ]
* Disaster-area taxpayers with extensions: Some must file by Feb. 3, others May 1 [ #Second ]
* Reminder: Final 2024 quarterly estimated tax payment due Jan. 15 [ #Third ]
* Standard mileage rate for business use increases for 2025 [ #Fourth ]
* Submit feedback on draft instructions for Form 6765, Credit for Increasing Research Activities [ #Fifth ]
* Final rules identifying certain partnership related-party "basis shifting" transactions as transactions of interest [ #Sixth ]
* Other tax news [ #Seventh ]
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*  IRS announces Jan. 27 start to 2025 tax filing season; continues historic improvements to expand, enhance tools and filing options*
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The 2025 tax filing season starts on *Monday, Jan. 27, 2025* for Form 1040 filers, and will feature expanded and enhanced tools to help taxpayers as a result of the agency’s historic modernization efforts.

These improvements include:


* Expanding Direct File to 25 states.
* More in-person help.
* High levels of service on main taxpayer phone lines.
* Mobile-friendly tax forms.
* Virtual assistants to help with refunds, other questions.

Businesses can sign up for an IRS Business Tax Account [ [link removed] ] to make filing taxes easier and help protect their tax information. Taxpayers can use online account for individuals [ [link removed] ] if they file personal tax returns.

For taxpayers who will file with the help of a tax professional, the IRS urges them to use a trusted tax pro [ [link removed] ] to avoid potential scams and schemes.

The Get Ready [ [link removed] ] page on IRS.gov highlights steps taxpayers can take now to streamline the filing process. It also has many resources to help taxpayers before, during and after filing their federal tax return.

Find more info, including details on these topics, in the start of filing season announcement [ [link removed] ].

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*  Disaster-area taxpayers with extensions: Some must file by Feb. 3, others May 1*
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The due dates for disaster-area taxpayers who received extensions to file their 2023 returns depend on their location.

For full details read disaster extension news release [ [link removed] ].

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*  Reminder: Final 2024 quarterly estimated tax payment due Jan. 15*
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The IRS reminds small businesses to make their fourth quarter estimated tax payment [ [link removed] ] on or before *Jan. 15, 2025*.

Some taxpayers who pay quarterly may overlook this last payment deadline of the year, which can result in unexpected penalties and fees when they file their returns in 2025.

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*  Standard mileage rate for business use increases for 2025*
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The standard mileage rate for vehicles driven for business will increase [ [link removed] ] by 3 cents in 2025. The mileage rates for vehicles used for other purposes will remain unchanged from 2024.

The updated standard mileage rates for the use of a car, van, pickup or panel truck are:


* 70 cents per mile driven for business use.
* 21 cents per mile driven for medical purposes.
* 21 cents per mile driven for moving purposes for qualified active-duty members of the Armed Forces.
* 14 cents per mile driven in service of charitable organizations.

The rates apply to fully electric and hybrid automobiles, as well as gas and diesel powered vehicles.

Notice 2025-5 [ [link removed] ] contains the optional 2025 standard mileage rates, as well as the maximum automobile cost used to calculate mileage reimbursement allowances under a fixed-and variable rate plan.

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*  Submit feedback on draft instructions for Form 6765, Credit for Increasing Research Activities*
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The IRS needs stakeholder input on the recently released draft instructions for Form 6765, Credit for Increasing Research Activities, also known as the research credit. The agency specifically wants feedback on Section G reporting for controlled groups, ASC 730 Directive, Section G business component detail and statistical sampling.

See the news release about the draft instructions [ [link removed] ] for how to submit feedback.

Small business with qualifying research expenses can apply up to $250,000 of research credit against their payroll tax liability [ [link removed] ].

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*  Final rules identifying certain partnership related-party "basis shifting" transactions as transactions of interest*
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The Department of the Treasury and the IRS issued final regulations identifying certain partnership related-party “basis shifting” transactions as transactions of interest [ [link removed] ] – TOIs – subject to the rules for reportable transactions.

The regulations include:


* Increased dollar threshold for basis increase in a TOI.
* Limited retroactive reporting for open tax years.
* Additional time for reporting.

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*  Other tax news*
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These topics may be of interest to small businesses and their partners:


* IRS announces special payments issued to 1 million taxpayers [ [link removed] ] who didn’t claim 2021 Recovery Rebate Credit
* Proposed regulations on new Roth catch-up rule, other SECURE 2.0 Act provisions [ [link removed] ]
* Proposed regulations to update rules for tax professionals who can practice before the IRS [ [link removed] ]

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