DNA Low Income Tax Clinic (LITC)

Dear Taxpayer,


The 2025 Tax Season is approaching, and we want to share some information and tips with you before it is time to file your 2025 tax return.

Why File?

You might receive a refund.  

According to the Tax Policy Center, about $7 billion in benefits go unclaimed each year.  Refunds come from (i) excess taxes withheld from your paycheck or (ii) the earned income tax credit (“EITC”) and/or the child tax credit (“CTC”).

For 2025 federal returns, the maximum EITC ranges from $649 for workers with no children to $8,046 for workers with three or more children.  The maximum CTC for 2025 is $2,200 per qualifying child.

You can still file for 2022, 2023, or 2024.  

The IRS allows taxpayers to file a Form 1040 within three years of the original filing deadline.  The final dates to file are:

  • April 18, 2026 for Tax Year 2022;
  • April 15, 2027 for Tax Year 2023; and
  • April 15, 2028 for Tax Year 2024.

Avoid Penalties. 

You may incur penalties if you owe money to the IRS and fail to file or pay.  If you owe and file more than 60 days late, the minimum IRS penalty for failing to file is $510. Arizona and New Mexico both have failure to file penalties as well.

Protect Yourself Against Identity Theft. 

Identity thieves will not be able to file a fraudulent return in your name if you file your return early. You can file your return even if you are not required to file.

Filing Can Be Free.

Volunteer Income Tax Assistance (“VITA”) and Tax Counseling for the Elderly (“TCE”) trained volunteers must pass a test each tax season and are qualified to help low-income taxpayers file their returns.

  • IRS Free Tax Prep Help Locator: https://irs.treasury.gov/freetaxprep/
  • VITA Sites Within Indian Country:
    • Navajo Nation:
      • DNA – Chinle Office | Navajo Route 7, Chinle, AZ
      • Navajo United Way | 264 Loop Rd, Window Rock, AZ
    • Havasupai Tribe:
      • TU Grand Canyon Havasupai Tribe | 10 Main St., Supai, AZ
    • Jicarilla Apache Nation:
      • THNM/Jade Community Education Learning Center | 59 Thunderbird Dr., Jade Bldg, Dulce, NM
  • Additional VITA/TCEs/AARP Foundation Sites Serving Indian Country:
    • Flagstaff:
      • AARP – Flagstaff Public Library | 300 W. Aspen Ave., Flagstaff, AZ
      • AARP – Joe C. Montoya Community and Senior Center | 245 N. Thorpe Rd., Flagstaff, AZ
    • Farmington Area:
      • VITA – Four Corners Tax Help | 5101 College Blvd., Farmington, NM
      • TCE at San Juan College Kirtland Campus | 69 Rd. 6500, Kirtland, NM
  • Other VITA Sites Serving Indian Country: https://www.irs.gov/government-entities/indian-tribal-governments/vita-sites-serving-indian-country

When You File, Remember These Tips:

The IRS may provide you with Free File options.

Visit IRS.gov/FreeFile to explore options for free guided tax software and eligibility.

IRS Direct File is no longer available.

If you used IRS’s Direct File in the past and need a copy of your return, submit Form 4506, Request for Copy of Tax Return.

Use an enrolled agent.

If you use a paid tax preparer, use an enrolled agent (“EA”).  EAs must pass a rigorous IRS test and take 72 hours of tax classes every three years.  (CPAs and attorneys are also subject to strict education requirements.)  Most commercial tax preparers are not as qualified as EAs and have an error rate as high as 89 percent.

To find an enrolled agent near you, visit the National Association of Enrolled Agents’ website: https://taxexperts.naea.org/expertdirectory

Or, visit the IRS’s directory of preparers to find attorneys, certified public accountants, enrolled agents, or a preparer with special IRS training: https://irs.treasury.gov/rpo/rpo.jsf

Use Direct Deposit. 

The IRS is phasing out paper check refund checks due to the presidential executive order, Modernizing Payments To and From America’s Bank Account.

Avoid tax preparation loans.

Commercial preparers advertise interest-bearing loans as “advances” with “no fees” against your refund.  Interest rates can be high and cost taxpayers hundreds of dollars.

Beware of “Ghost Preparers”

A ghost preparer is someone who requires payment to prepare a tax return but does not otherwise identify themselves. They may encourage taxpayers to take advantage of tax credits and benefits they don’t qualify for and take a large percentage or the entire refund. Ghost preparers often disappear after receiving payment and leave the taxpayer to deal with any tax consequences.

Know your rights as a Taxpayer.  

Tax preparers MAY NOT:

  • Require that you borrow against your refund, i.e., may not force you to agree to a loan.
  • May not ask you to sign a blank or incomplete return.
  • Refuse to provide you with a copy of the entire return, including copies of all schedules.

Know the difference between 1099s and W-2s.  

You will receive a W-2 if you performed services as an employee.  However, if you were an independent contractor, you will receive a 1099-NEC or 1099-MISC.  The taxes you pay are different depending on which form you get.  Independent contractors usually end up paying higher taxes because they pay the Self-Employment tax themselves.  Sometimes employers will issue a 1099 instead of a W-2 to save themselves money and avoid providing important employee and social security benefits.  A Low-Income Taxpayer Clinic can help you determine whether you classify as an employee or independent contractor and help you file an SS-8.

Gather and keep complete records if you are SELF-EMPLOYED or an INDEPENDENT CONTRACTOR.  

The IRS requires those who are self-employed or are independent contractors to report income to the IRS on a Schedule C or Schedule 1 Form.  Be sure to have complete records of income and expenses when you go to your income tax preparer.  You may be able to deduct related expenses.  IRS Publication 334 identifies exactly what you need: https://www.irs.gov/forms-pubs/about-publication-334.

Form 1099-K.

If you are a gig worker, hobby seller, self-employed, a partner in a partnership, or run a corporation, you will generally need to report any income reported on a Form 1099-K.  You will receive a Form 1099-K if you received payments for goods and services sold exceeding $600 through platforms like Zelle, Venmo, eBay, or PayPal.  However, you may also be able to deduct related expenses.  Again, keep good records of all income and expenses.

Review New Tax Law Changes.

New legislation, including provisions within the “One, Big, Beautiful Bill Act”, changes tax returns for individuals, families and dependents, businesses, investment and community development, clean energy, tax exempt entities and charitable giving, and other taxes.

Questions?

Call us! 

DNA’s LITC is ready to help. DNA’s Central Intake Number: 1-833-362-1102

IRS FAQs for Tribal Members.

The IRS website provides answers to some Frequently Asked Questions regarding Tribal Members’ individual income tax obligations and responsibilities at: https://www.irs.gov/government-entities/indian-tribal-governments/faqs-for-indian-tribal-governments-regarding-individual-income-taxes

Sincerely,

DNA’s Low Income Taxpayer Clinic