Talking tax season tips with University of Minnesota

As the tax filing deadline approaches, being prepared can save you time, money and stress. David Horn, the director of the Master of Business Taxation Program at the University of Minnesota’s Carlson School of Management, shares his insights on what to keep in mind this tax season.

Q: Are there any significant changes this year?
Horn: One thing is constant: the deadline to file your tax return is April 15. However, you may file an automatic extension to file your return six months after April 15. It’s important to remember if you extend your return, you're still required to pay any taxes owed by April 15.

2024 was pretty light with federal tax legislation for the everyday individual taxpayer. It was an election year, which often means there isn’t a lot of activity from Congress because no one wants to rock the boat. Other than brackets, deductions and thresholds being indexed to inflation, the tax laws are mostly the same as 2023 for individual taxpayers.

Q: What are some of the biggest challenges this tax season?
Horn: One of the Trump administration’s first actions was to announce a hiring freeze and personnel cuts across the federal government, which includes the IRS. There is some uncertainty about how this will impact the agency during filing season; however, a reduction in IRS staffing may result in the delayed processing of returns and issuing refunds. Filing early is always a good rule of thumb. The earlier you file, the sooner your return will be processed and the sooner you will receive any potential tax refund. As we get closer to the filing deadline, contacting the IRS with questions gets more difficult.

Q: What is your advice to make tax preparation go smoothly?
Horn: It’s all about understanding your sources of income and deductions. I advise clients to go through all their financial accounts and understand where they potentially could be receiving tax documents. That may include a W-2 for wages from your employer, 1099 forms for investment and savings accounts, a 1098-E for student loans, etc. Gathering all the relevant documentation will streamline the return preparation process.

Another issue affecting more people this year is increased reporting around peer-to-peer payment systems, such as Venmo and PayPal. In 2024, the threshold for reporting transactions from these services was reduced from $20,000 to $5,000. If you received $5,000 or more in payments through one of these applications for goods and services sold, you're going to get a 1099-K document. However, using these platforms to collect expense reimbursements amongst friends and family should not be reported on Form 1099-K. Consult with a tax professional to help decipher the reporting requirements if you receive a 1099-K.

Q: How do I avoid tax scams?
Horn: The IRS generally initiates contact through the mail. If you ever get a phone call or email from someone claiming they're from the IRS stating that you owe money and threatening to call law enforcement, that is a scam and you should hang up. The IRS also doesn't accept payments through unusual sources, such as Apple gift cards. That is another red flag that it is a scam. For more tips to avoid potential scams, visit the IRS website.

Q: What is the University of Minnesota doing in regard to the ongoing shortage of tax professionals?
Horn: The University of Minnesota plays an important role in the pipeline of developing tax professionals. For nearly 45 years, the Carlson School’s Master of Business Taxation (MBT) program has built a reputation as one of the top graduate tax programs in the nation. Its 1,300+ alumni are influencing some of the world’s largest companies and firms, with many holding top positions as senior corporate tax executives and managing tax partners.

David Horn joined the Carlson School of Management in 2024 and currently serves as the Director of the MBT program. David began his career in the tax department at Ernst & Young, where he specialized in corporate and partnership taxation, and then served as the head of the tax department at Proto Labs, Inc., managing the company’s global income tax function. Prior to the Carlson School, he was an associate professor at Metropolitan State University.