Overview
- Treasury Secretary Scott Bessent forecast a “gigantic refund year” for early 2026, with independent estimates ranging from roughly $100 billion in extra refunds to average boosts near $1,000 for many households.
- New provisions under the One Big Beautiful Bill Act include deductions for tips (up to $25,000 per person or $50,000 for joint filers) and overtime ($12,500 single or $25,000 joint), a temporary extra $6,000 deduction for seniors, and larger standard and child tax credits.
- Because 2025 payroll withholding generally did not reflect these changes, many workers likely overpaid during the year and are poised for larger-than-usual refunds when filing 2025 returns.
- The IRS released 2026 bracket and deduction updates, with lower brackets widened by about 4% and higher ones by roughly 2.3%, and the standard deduction set at $16,100 for single filers, $32,200 for joint filers, and $24,150 for heads of household.
- Lawmakers warn of potential delays as the IRS finalizes forms such as the new Schedule 1-A and manages staffing constraints, while tax-prep firms signal a late January or early February filing start and urge direct deposit and updated 2026 withholding.