Overview
- Experts say many workers overpaid in 2025 because withholding tables were not updated after the OBBBA, setting up larger refunds when filing 2025 returns in early 2026.
- Inflation-adjusted 2026 brackets and standard deductions are in place, and updated withholding this year is expected to yield slightly larger paychecks for most workers.
- New and expanded breaks include capped deductions for tips and overtime, a $6,000 deduction for many seniors, and a higher SALT cap that helps only itemizers, with phaseouts limiting eligibility for higher earners.
- Analysts and lawmakers warn the IRS may struggle to process returns quickly due to staffing losses, leadership gaps and extensive form updates, creating a risk of delays.
- The IRS urges taxpayers to set up online accounts, opt for direct deposit as paper checks are phased out, and remember to report gig payments and digital-asset transactions, including where 1099-K thresholds apply.