IRS Announces Filing Date

The 2025 tax season officially opens on January 26th. This is the earliest date that your business or personal returns can be e-filed for 2025.

Paper check update

As part of the prior Executive Order to eliminate paper checks, the IRS further clarified how they will handle returns receiving refunds that do NOT provide direct deposit information

• If you file your return without direct deposit information, once the IRS processes your return you will receive a letter from the IRS indicating the bank data is missing.
• The IRS will allow 30 days for you to provide your banking information through your IRS online account or by calling a dedicated phone line they will provide to you.
• If you do not provide the data within 30 days, the IRS will hold the refund for 6 weeks before issuing the refund as a paper check.
• The paper check will be mailed to the last know address on file with the IRS. Paper checks are slower and carry a higher risk of being lost or stolen

For what is worth, 93% of taxpayers receive refund via direct deposit already so this effort is focused on the 7%

CO TABOR Update

Similar to last year, the CO TABOR refund will be part of the 2025 CO tax return. If you qualify for TABOR, it will either be automatically added to your 2025 refund or reduce the amount you owe. No further action is needed on your part.

TABOR is significantly lower than prior years due to changes in state law that directs more of the state's excess revenue to other programs/tax credits. The amount is based upon your income level.

• For single filers, the TABOR refund will range form $19 to $59
• For joint filers, the TABOR refund will range from $38 to $118

Trump Account Update

Additional information is coming out on the newly announced TRUMP accounts that were part of HR-1 (Big Beautiful Bill).

• To open a Trump account, you must be a parent or legal guardian of an eligible child and provide your information along with the child's information.
• An eligible child must
• Have a valid social security number,
• Be under the age of 18 at the end of the calendar year in which the account is opened,
• Be a US citizen
• The account can be established by filing form 4547 with your 2025 tax return or by using an on-line portal being set up by the IRS and expected to be available later in 2026.
• Accounts will not actually become active until July 4, 2026 and no contributions can be made until that time.
• The annual contribution limit to Trump accounts is $5,000 per eligible child with contributions from parents, relatives and friends all counting toward the annual limit.
• Children born between January 1, 2025 and December 31, 2028 are eligible for a one-time "seed" contribution of $1,000 from the federal government. This contribution must be elected on from 4547.
• It is best to consult your financial advisor on the merits of Trump accounts compared to other available options (529 accounts, custodial investment accounts, IRA's etc.) depending on what your objectives are (education, savings, retirements, etc.).
• Having said that, for those with children born in 2025 or 2026 (before filing), it would seem wise to set up a Trump account to at least receive the $1,000 seed money as this is essentially free money from the government.

REMINDER

For those making quarterly estimated payments - the Q4 estimated payment is due tomorrow (Jan 15th)

In case you missed our first tax season alert with important data on organizers and cutoff dates, use the link below to access it. As a reminder, all prior newsletters are always on our website in the event you need to access them.