If you haven’t filed your 2025 tax return yet, you’re in for a pleasant surprise. Thanks to the One Big Beautiful Bill Act signed into law last July, millions of Americans are about to see bigger refunds and lower tax bills than ever before. In fact, President Trump recently announced that 2026 is projected to be “the largest tax refund season of all time.”
Whether you’re a senior, parent, tipped worker, or small business owner, these sweeping tax changes could put hundreds or even thousands of dollars back in your pocket. Here’s everything you need to know about how this historic legislation affects your taxes.
What Is the One Big Beautiful Bill?
The One Big Beautiful Bill Act, signed on July 4, 2025, is the biggest overhaul of the US tax code since 2017. It permanently extended the Tax Cuts and Jobs Act provisions and added brand new tax breaks that are already changing how Americans file their returns.
The law reduced individual income taxes by approximately $144 billion for 2025 alone. Tax experts estimate that average refunds could increase by 15 to 20 percent this filing season, with some families seeing refunds jump by $1,000 or more.
Bigger Standard Deduction for Everyone
One of the most impactful changes affects every taxpayer who claims the standard deduction. For 2025 tax returns filed in 2026, the standard deduction increased beyond normal inflation adjustments.
Here’s what you can claim: married couples filing jointly can deduct $31,500, single filers get $15,750, and heads of household can deduct $23,625. These amounts are significantly higher than previous years, meaning more of your income is protected from taxes.
If you’re not sure whether to itemize or take the standard deduction, our professional tax filing services can help you choose the option that maximizes your refund.
Game-Changing $6,000 Senior Deduction
If you’re 65 or older, you just got a massive tax break. The One Big Beautiful Bill created a brand new deduction of up to $6,000 for individuals or $12,000 for married couples where both spouses are 65 or older.
But there’s a catch. This deduction phases out based on your modified adjusted gross income. If you’re single and your income exceeds $75,000, or married filing jointly with income over $150,000, your deduction starts to reduce. The deduction disappears completely at $175,000 for singles and $250,000 for joint filers.
Our tax services team can calculate exactly how much you qualify for and ensure you claim every dollar you’re entitled to.
No Tax on Tips or Overtime
This is huge news for millions of service workers and hourly employees. Starting with income earned on January 1, 2025, tips and overtime pay are completely exempt from federal income tax.
Workers can deduct up to $25,000 in cash tips, including tips paid through credit and debit card transactions. If you earned overtime in 2025, that income is also tax-free. Your employer should have provided documentation by January 31, 2026, showing exactly how much tip and overtime income you earned.
If you’re a freelancer or gig worker who also receives tips, understanding how to properly report this income is critical for maximizing your tax benefits.
Car Loan Interest Deduction (2025-2028 Only)
Here’s a temporary but valuable deduction. From 2025 through 2028, you can deduct interest paid on auto loans. This applies to most personal vehicle loans, though there are some restrictions.
Your lender was required to send you a statement by January 31, 2026, showing the total interest you paid in 2025. Make sure you have this document ready when you file. This deduction alone could save you hundreds of dollars if you have a car payment.
Higher SALT Deduction Cap
The state and local tax deduction cap jumped from $10,000 to $40,000 for tax years 2025 through 2029. This is massive news for taxpayers in high-tax states like California, New York, and New Jersey.
The cap will increase by 1 percent each year through 2029. If you live in a state with high income or property taxes, this change could significantly reduce your federal tax bill. Check out our state-specific guides for California, New York, and New Jersey for more details.
Expanded Child Tax Credit
Parents and caregivers got a boost too. The childcare tax credit increased for 2026, allowing parents to receive credits for up to 50 percent of eligible childcare expenses. Qualifying expenses are capped at $3,000 for one child and $6,000 for two or more children.
This is up from a maximum of $2,200 per child in 2025. If you’re paying for daycare, after-school care, or summer camps, make sure you’re keeping detailed receipts and documentation. Our company tax filing services can help business owners understand how employer-provided childcare benefits factor into this equation.
Trump Accounts for Children
Starting in July 2026, a brand new savings vehicle called “Trump Accounts” will be available for children under 18. Here’s how it works.
Children born between January 1, 2025, and December 31, 2028, automatically receive a one-time $1,000 government contribution to their Trump Account. Parents can contribute up to $5,000 per year, and employers can add up to $2,500 annually.
The account grows tax-deferred, similar to a traditional IRA. Children cannot withdraw funds until they turn 18, at which point the account functions like a retirement account. This is an incredible opportunity to jumpstart your child’s financial future with free government money.
What This Means for Your 2026 Refund
Because the IRS didn’t update withholding tables for 2025, most workers didn’t see these tax cuts reflected in their paychecks throughout the year. That means the savings are coming all at once when you file your return.
Tax experts project that average refunds will increase by $300 to $1,000 this year. Some families could see even larger increases depending on their specific situation. If you’re a senior claiming the new $6,000 deduction, have children, paid car loan interest, or earn tips and overtime, your refund could be substantially higher.
Don’t Leave Money on the Table
These tax changes are complex, and it’s easy to miss deductions and credits you’re entitled to. Small mistakes can cost you hundreds or thousands of dollars in lost refunds.
Our affordable tax filing services are designed specifically to help Americans navigate these new rules. We stay up to date on every change in tax law so you don’t have to.
Whether you need help with individual tax returns, business taxes, or bookkeeping services, our IRS-authorized team is ready to maximize your refund and ensure you’re fully compliant.
Tax season officially opened on January 13, 2026. The sooner you file, the faster you’ll receive your refund. Contact us today or check out our tax pricing packages to get started. Don’t let another day go by without claiming every dollar you deserve.
