Top Headlines

Feeds

IRS 2026 Tax Season Launches With Senior, Overtime Deductions and Higher Refunds

Updated (6 articles)

Tax Season Opens Jan 26, Filing Window Set The IRS began accepting 2025 returns on January 26 and will close the filing period on April 15, projecting roughly 164 million individual returns for the year [1]. Taxpayers must file electronically or by mail within this window, and the agency warns that late submissions may incur penalties. The filing schedule aligns with the first year the One Big Beautiful Bill Act takes effect [1].

One Big Beautiful Bill Introduces Senior, Overtime Deductions The new law adds a $6,000 deduction for seniors 65 and older (up to $12,000 for joint returns) and permits workers to deduct qualified overtime pay up to $12,500 per return ($25,000 joint) and tipped income up to $25,000 annually [1]. Claimants must attach the newly created Schedule 1‑A to report these deductions [1]. Phase‑outs apply at higher income levels, limiting the benefit for top earners [1].

Standard Deduction and SALT Cap Adjustments Raise Itemization For 2026 the standard deduction rises to $15,750 for single filers and $31,500 for married couples filing jointly [1][2]. The SALT deduction limit is temporarily increased, with CNN specifying a jump to $40,000 from the prior $10,000 cap, encouraging more high‑tax‑state taxpayers to itemize [2]. Newsweek notes the cap is “temporarily raised,” allowing larger federal deductions for high‑income filers in states with steep local taxes [1].

Projected Refunds Grow $1,000 per Household IRS data show the average 2025 refund was $3,167, and Treasury forecasts add roughly $1,000 to each household’s refund for 2026 [2]. The boost stems from expanded tax credits for the 2025 tax year and the fact that most workers kept 2024 withholding levels unchanged [2]. Analysts advise a modest reduction on the W‑4 to avoid underpayment while taking advantage of the larger refunds [2].

Free Filing Options and Electronic Refunds Dominant The IRS Free File program continues to offer free tax‑software access, and Free File Fillable Forms are available to any filer [1]. Paper refund checks are being phased out after a March executive order, so most refunds are issued electronically within 21 days and can be tracked via the Where’s My Refund? tool or the IRS2Go app [1]. The Direct File program was discontinued in 2025, leaving free software and electronic delivery as the primary filing pathways [1].

Sources (2 articles)

Timeline

July 2025 – President Donald Trump signs the One Big Beautiful Bill Act, launching a multi‑year tax overhaul that adds expanded credits, new senior, tip and overtime deductions, and mandates crypto exchanges to issue IRS Form 1099‑DA by mid‑February 2026[2].

Dec 12, 2025 – The IRS announces a temporary $6,000 senior deduction for taxpayers 65 and older, phased out above $75,000 (single) or $150,000 (joint) income, to apply to tax years 2025‑2028 and be claimed on 2025 returns filed in 2026[6].

Dec 17, 2025 – Treasury releases the One Big Beautiful Bill Act details: standard deduction rises to $15,750 (single), $31,500 (married), $23,625 (head of household); SALT cap expands to $40,000 with high‑income limits; car‑loan interest becomes deductible up to $10,000; tip and overtime deductions are created; “$1,000 ‘Trump Accounts’ for babies born 2025‑2028” are instituted; clean‑vehicle credits accelerate expiration after Sept 30 2025; crypto exchanges must issue 1099‑DA by mid‑Feb 2026[2].

Dec 20, 2025 – Analysts outline the January 2026 tax changes: tip exemption up to $25,000 (phasing out above $150k/$300k joint); overtime exemption up to $12,500 per individual ($25,000 joint); standard deduction set at $16,100 for singles and $32,200 for married couples; “child tax credit is permanently raised to $2,200”; SALT deduction cap lifts to $40,000 for incomes under $500,000 for five years; energy credits (EEHIC and RCEC) expire at the start of 2026; a $1,000/$2,000 charitable pre‑adjustment deduction is added[4].

Jan 26, 2026 – The IRS opens the 2026 filing season, accepting 2025 returns from Jan 26 through Apr 15 and projecting about 164 million individual returns; the Direct File program is no longer offered after being scrapped in 2025[3].

Jan 26, 2026 – Treasury projects the average 2025 refund of $3,167 will rise by roughly $1,000 per household in 2026, driven by new 2025 tax breaks and unchanged withholding; “IRS filing data show the typical refund last year was $3,167, and Treasury projections add roughly $1,000 to each household’s refund this year,” and O’Saben advises a modest W‑4 reduction to avoid underpayment while improving cash flow[1].

Jan 27, 2026 – The IRS confirms the first filing period under the One Big Beautiful Bill Act, requiring Schedule 1‑A for senior, tip and overtime deductions; standard deduction for 2026 returns is $15,750 (single) and $31,500 (married); the SALT cap remains temporarily raised; refunds are issued electronically within 21 days and “paper refund checks are being phased out after a March executive order”[3].

Feb mid‑2026 – Crypto exchanges begin issuing IRS Form 1099‑DA for cryptocurrency transactions, fulfilling the One Big Beautiful Bill Act’s compliance requirement for the 2025 tax year[2].

Mar 2026 – An executive order phases out paper refund checks, making electronic direct deposit the default method for most taxpayers and reinforcing the IRS’s 21‑day electronic refund timeline[3].

Apr 15, 2026 – The filing deadline for 2025 tax returns arrives, closing the 2026 tax‑season window that began on Jan 26[3].

2026‑2028 – The $6,000 senior deduction remains in effect each year for eligible seniors, but “experts say higher deductions can reduce taxable income and soften the tax impact for many retirees,” and the provision is scheduled to expire at the end of 2028 unless renewed[5][6].

2026 onward – The expanded SALT deduction cap of $40,000 applies for five years, set to revert after 2030 unless Congress extends it[4].

2025 onward – The child tax credit stays at $2,200 per child permanently, providing ongoing relief for families filing 2025 returns and beyond[4].

2025 onward – Clean‑vehicle tax credits lapse after Sept 30 2025, reducing incentives for electric‑vehicle purchases beginning in 2026[2].

All related articles (6 articles)

External resources (14 links)