The Internal Revenue Service is officially starting the 2026 tax filing season with a major announcement for millions of families. This year is set to be one of the most significant periods for taxpayers as the agency expects to process around 164 million individual returns. Due to the recent passage of the One Big Beautiful Bill Act, the average tax refund is projected to be much higher than in previous years. In fact, many experts believe this will be the largest refund season on record with the average payment potentially increasing by as much as $1,000.
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Major Changes to How You Receive Your Money
The biggest shift for taxpayers this year involves how the government sends out money. Following a recent executive order, the federal government has started to phase out paper refund checks. This move is designed to make payments more secure and efficient while reducing the risk of mail theft and fraud. Because paper checks are historically 16 times more likely to be lost or stolen than electronic payments, the government is pushing for a digital first approach. Most people will now need to provide their bank routing and account numbers to get their money through direct deposit.
Why Your 2026 Refund Might Be Much Larger
If you noticed that your paycheck stayed the same last year despite new tax laws, you are not alone. Many employers did not immediately adjust tax withholding to account for the new credits and deductions available under the One Big Beautiful Bill Act. This means that millions of Americans essentially overpaid their taxes throughout the year. When you file your return this season, that overpayment comes back to you as a larger refund. For some households, the combination of new senior deductions and expanded child credits could lead to a significant financial windfall.
Exploring the New Tax Deductions and Credits
There are several new ways to lower your tax bill this year that were not available in the past. Seniors who are at least 65 years old can now take advantage of a massive $6,000 deduction. There are also specific benefits for workers who earn a lot of their income through tips or overtime. For the first time, you may be able to deduct interest paid on car loans for new personal vehicles. These changes are part of a broader effort to provide relief to middle income families and specialized workers across the country.
Important Tax Benefit Comparison
The following table highlights the key differences between the old rules and the new benefits available for the current filing season.
| Tax Provision | Previous Limit | New 2026 Benefit |
| Standard Deduction (Single) | $15,000 | $15,750 |
| Standard Deduction (Joint) | $30,000 | $31,500 |
| Child Tax Credit | $2,000 per child | $2,200 per child |
| Senior Deduction (Age 65+) | $1,600 | $6,000 |
| Overtime Pay Deduction | Not Available | Up to $12,500 |
| Tipped Income Deduction | Not Available | Up to $25,000 |
| Car Loan Interest | Not Available | Up to $10,000 |
Tips for a Faster Refund This Year
To ensure you get your money as quickly as possible, keep these points in mind:
- File your taxes electronically rather than using paper forms to avoid long processing delays.
- Choose direct deposit to have your funds sent straight to your bank account.
- Double check your bank account and routing numbers to prevent your refund from being frozen.
- Gather all documentation for new deductions like overtime pay or car loan interest before you start.
- Submit your return well before the April 15 deadline to beat the final rush.
