Tax season guide: Expert explains which form to file and who can file for free

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Tips for filing taxes from expert (6:15 a.m.)

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ALBANY, N.Y. — Tax season is officially underway. The IRS expects over 140 million people to file tax returns before the April 15 deadline. News10NBC spoke with local tax professional Albert Burgos of Burgos Income Tax to get some insights.

Most taxpayers are either W2 or 1199 filers. W2 filers are salaried or hourly workers. With the rise of the gig economy, a growing number of people are self-employed and file 1099s.

Burgos says hiring an expert helps you to ensure that you’re getting every single credit and write-off available. The tax code spans 75,000 pages but most of it is situation-specific, so working with someone familiar with the forms can simplify the process.

“You’re going to be paying all these taxes if you don’t record things properly. But you can hire people, buy equipment, travel, but it has to be necessary and ordinary to that specific business,” Burgos said. “You have to be honest. It has to be related to that specific business, but you can spend and spend. Again, it helps you grow your business.”

If you make less than $84,000, you can file state and federal taxes for free online. This year, the IRS is expanding its Direct File program. It allows people to file their taxes directly with the agency for free and without commercial tax preparation software. The program is available in New York State and 24 other states, up from 12 states from last year.

How can New Yorkers use Direct File?

Direct File is now open, with 3.4 million New Yorkers expected to use the free program. Eligible taxpayers can use the IRS Direct File to sumbit their federal return, then export their information into the New York State Direct File to complete their state return.

You can access Direct File from your computer or smartphone here and check your eligibility. For example you or your spouse (if planning on filing together) must be a full-year resident of New York State and you must use the standard deduction.

How can you use the IRS’s eight trusted partners to file for free?

The IRS lists eight trusted partners on its website which you can use to file taxes for free. You can see the list here and learn if you’re eligible to file for free here.

How do you claim digital income or cryptocurrency?

With the start of a new year and a new presidential administration, changes in tax rules are on the horizon. Burgos explains that while taxes are a certainty, the tax code is complex and constantly evolving.

One of the recent changes gaining traction involves digital currencies and digital income. Burgos compares cryptocurrency to stocks: if you only purchase and hold, there’s no tax obligation. However, if you sell, the government will expect a share, reported on the capital gains form.

Payment apps like CashApp, Zelle, and Venmo are also under scrutiny. This year, receiving $5,000 through CashApp might result in a 1099-K form. Next year, the threshold drops to $600. These apps help distinguish between business and personal payments.

“There’s garage sales, there’s families giving money to children, but there’s a way to get around it on the 1040 form. We have a Schedule One place to put this. There’s a place to say no, this is not a business, it’s a personal transaction,” Burgos said.

If you receive a 1099-K for family transactions, the IRS advises contacting the issuer, such as Zelle, directly. While President Donald Trump suggested changes like not taxing tips, these proposals must pass through Congress and remain uncertain for now.

When can you see your refund?

The IRS says it should take 21 days or less to get your refund if you file electronically. If you choose to get a refund with direct deposit, it should take even less time. If you file a paper return, the refund could take four weeks or more. Also keep in mind, if your return requires amendments or corrections, it could take longer.

Taxpayers can track their refund with the IRS’s online tool Where’s My Refund? You can check within 24 hours of online filing and within four weeks of filing a paper return.

Am I eligible for the Child Tax Credit?

You qualify for the full amount of the Child Tax Credit if your annual income is less than $200,000 ($400,000 if filing a joint return).

In addition, your child must be claimed as a dependant on your tax return and must have a Social Security number. Your child must have been under the age of 17 at the end of 2024. The credit is up to $2,000 per qualifying child.