In July 2025, the “One Big Beautiful Bill Act” was officially signed into law, and it will change the average taxpayer’s taxes for the 2025 reporting season.
According to research from the Tax Foundation, a nonpartisan think tank in Washington, D.C., the average American taxpayer is on track to get a refund that’s between $300 to $1,000 more than the previous year’s.
But, that doesn’t mean you’re home free. There are rules and ways to have to prepare your taxes to get the added refund. To start, you’ll need to fill out a Schedule 1-A form, which is a fresh form that’s available here.
Information on 2026 Taxes
The first day to file taxes is on Monday, Jan. 26. One big change this year is that for people getting tax returns, you won’t be able to receive your money by paper check. So, you’ll have to link your bank account and receive your refund through direct deposit.
So, exactly how much more bag should you expect in your refund? According to research from the IRS, in 2025, the average taxpayer received a refund of $3,052 for the 2024 tax season. This year, they’re looking at anywhere from $300 to $1,000 more because of new tax breaks.
The standard deduction has changed and will go up by $750 to $15,750 for the 2025 tax year for single filers or by $1,500 to $31,500 for married couples who are filing jointly.
Changes in 2026 Taxes: Tips, Overtime and Auto Loan Interest
Waiters, bartenders and other workers who “customarily and regularly” get tips won’t have to pay on up to $25,000 of them. This pertains to single filers with modified adjusted gross incomes of less than $150,000 a year or joint filers taking in than $300,000.
Single filers won’t have to pay taxes on up to $12,500 in overtime payments, and joint filers can deduct up to $25,000 in overtime pay.
Did you buy a vehicle for personal use in 2025? You are now able to deduct up to $10,000 in auto loan interest per year, so long as you have adjusted gross incomes less than $100,000 per year for single filers or $200,000 for joint filers. Also, the vehicle had to have done the final assembly work in the U.S.
Taxpayers are allowed a larger SALT (state and local taxes) deduction of up to $40,000 instead of up to $10,000.
The child tax credit went up $200 year over year, increasing to $2,200 per child for the 2025 tax year. That’s for single filers with annual incomes up to $200,000 or joint filers up to $400,000.
Finally, people 65 and older are able to get an added $6,000 deduction for single filers or $12,000 per married couple. But, for those making more than $75,000 as a single filer or $150,000 for a joint filer will see that benefit phasing out.
