Tax season never really ends—it just evolves. With 2025 approaching, significant tax changes are on the horizon that will affect individuals and businesses alike. Understanding these changes now can help you position yourself for financial success and avoid unwelcome surprises when filing season arrives.
Key Tax Changes Coming in 2025
The tax landscape is shifting in several important ways. From registration fee increases to withholding adjustments, these changes require attention well before you file your next return.
New York State Tax Amendments
New York has recently amended its Tax Law to expand the scope of state and local sales tax. According to the New York Department of Taxation and Finance, the 2025 tax preparer registration application is already available—earlier than in previous years. This early availability suggests preparation for substantial changes that tax professionals need time to understand.
For employers in New York, March 2025 will bring significant changes to withholding tax and wage reporting requirements. The state's tax website notes that "Employers are required to withhold and pay personal income taxes on wages," but the specific adjustments haven't been fully detailed yet. If you're a business owner in New York, scheduling a consultation with your tax professional in early 2025 would be prudent.
Ohio Vendor's License Fee Increases
Ohio businesses will see an increase in vendor's license application fees, jumping from $25 to $50 in 2025. While this might seem minor, it represents a 100% increase that small businesses should factor into their startup or renewal costs. The Ohio Department of Taxation has already begun notifying businesses about these changes to prevent surprises.
Additionally, County Vendor's License and Sales Tax Account registrations in Ohio will undergo procedural changes. These modifications could affect processing times and documentation requirements for businesses operating across multiple counties.
What Should You Do Now?
Tax changes don't just affect your filing—they can impact your entire financial strategy. Here are some practical steps to take before these changes take effect:
1. Review Your Withholding
With withholding changes coming, particularly in states like New York, now is the time to review your current withholding status. Too much withholding means you're giving the government an interest-free loan; too little could result in an unexpected tax bill and potential penalties.
I recently adjusted my own withholding after realizing I was consistently getting large refunds—essentially lending money to the government all year. A simple adjustment to my W-4 put more money in my monthly budget instead.
2. Accelerate Business Registrations
If you're planning to start a business or need to renew licenses in states like Ohio, consider doing so before the fee increases take effect. While $25 might not break the bank, why pay more if you don't have to?
3. Prepare for New Reporting Requirements
The Financial Crimes Enforcement Network (FinCEN) has indicated new reporting requirements for companies in 2025. These requirements aim to increase transparency in business ownership. As their FAQ page notes, they're developing resources "to help reporting companies understand the new reporting requirements."
This could mean additional paperwork and compliance measures for business owners. Setting up more robust record-keeping systems now could save headaches later.
How Will These Changes Affect Your Tax Refund?
The IRS continues to emphasize that planning ahead "can help you file an accurate return and avoid delays that can slow your tax refund." With new rules coming into effect, this advice becomes even more critical.
Tax refund timing depends largely on:
- When you file
- How you file (electronically vs. paper)
- Whether your return contains errors
- If you claim certain credits
The new reporting and withholding requirements could potentially affect all these factors. Filing electronically remains the fastest way to get your refund, typically within 21 days for error-free returns.
What About Federal Tax Changes?
While state-level changes are clearly defined, federal tax policy remains somewhat uncertain. Several provisions of the Tax Cuts and Jobs Act are set to expire after 2025, which could mean higher federal income tax rates for many taxpayers starting in 2026.
This potential "tax cliff" makes 2025 a particularly important year for tax planning. Strategies like accelerating income into 2025 or deferring deductions until 2026 might make sense depending on your situation.
Don't Wait Until Tax Season
The worst time to learn about tax changes is when you're sitting down to file your return. By then, many planning opportunities have already passed. Instead, consider scheduling a mid-year tax review with your accountant to discuss how these changes might affect your specific situation.
Tax rules are complicated and constantly evolving. What works for one person might be completely wrong for another. The information here provides a starting point, but personalized advice is invaluable.
Disclaimer: This article is for informational purposes only and should not be construed as tax, legal, or financial advice. Tax laws vary by location and individual circumstances. Always consult with qualified tax professionals regarding your specific situation.
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