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The IRS begins the 2026 tax season on Monday, and filers will find out that changes from President Donald Trump’s “Big, Beautiful Bill” could affect their 2025 returns.
About 164 million individual tax returns are expected to be filed by the April 15 deadline, and many could receive even larger tax refunds after President Trump’s 2025 bill becomes law, experts say.
“The size of the tax refund is a major political topic” as the 2026 midterm elections approach, Andrew Lautz, director of tax policy at the Bipartisan Policy Center, a nonprofit think tank, told reporters on a conference call Thursday.
Typically, your refund or balance will depend on taxes paid in the previous year through payroll withholding or estimated payments. In 2025, the average refund for individual filers through Oct. 17 was $3,052, according to the IRS.
“There are a number of things that are likely to increase your refund during the (2026) filing season,” including 2025 tax cuts and withholding, Lautz said.
After President Trump’s 2025 tax changes, the IRS has not updated employers’ tax withholding schedules, and many workers will be affected when filing their 2026 taxes.
As many Americans continue to struggle with rising costs of living, the Trump administration has launched a number of policy proposals focused on affordability.
But more than half of Americans don’t know how President Trump’s 2025 tax reform will affect them, according to a new survey of 2,000 filers conducted in November by TaxSlayer.
Here’s what taxpayers can expect for the 2026 filing season.
Which tax deductions may affect your refund?
According to a Jan. 15 analysis by the Tax Foundation, the amount of refunds and taxes owed “will vary widely” depending on individual circumstances.
Garrett Watson, director of policy analysis at the Tax Foundation, a nonprofit think tank, told CNBC that President Trump’s 2025 tax law, which made the 2017 tax cuts permanent, is “more or less a continuation of the status quo.”
But the law also included an even larger basic deduction. More generous maximum child tax credit. Higher state and local tax (SALT) deduction limits. $6,000 tax break for seniors. Car loan interest, tip income, overtime pay, etc. are deductible.
Who will see an even bigger tax refund in 2026?
In 2025, the standard deduction increased to $15,750 for single filers and $31,500 for married couples filing jointly, up from $15,000 and $30,000, respectively.
“The result will be a larger refund for taxpayers who claim the standard deduction each year, from 85% to 90%,” Lautz said.
Another tax cut that could affect many filers is a new $6,000 “bonus” deduction for seniors 65 and older. You can take the full deduction for up to $75,000 in modified adjusted gross income, or $150,000 for married couples filing jointly.
Many families may also qualify for a larger child tax credit. For 2025, the maximum credit increases from $2,000 to $2,200.
Meanwhile, the SALT deduction and tax breaks for tips and overtime income could result in a “much larger” tax cut, but fewer filers would qualify, Lautz previously told CNBC.
Correction: This article has been updated to reflect that President Donald Trump’s 2025 Tax Act made the 2017 tax cuts permanent. A previous version of this article showed the wrong year.
