The arrival of the 2026 tax filing season marks a major shift for millions of American families and workers. Under the landmark One Big Beautiful Bill Act, significant changes have been implemented to increase the tax refund amounts for the 2025 tax year. As the IRS officially begins processing returns this week of January 30, 2026, staying informed is the best way to ensure you claim every dollar you deserve.
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New Deductions for Workers and Service Staff
A primary feature of the current tax season is the introduction of generous breaks for those who work extra hours or receive tips. For the 2025 tax year, qualified overtime pay can be deducted from your taxable income up to a cap of $12,500 for single filers. If you are married and filing jointly, this deduction doubles to a maximum of $25,000. These rules allow hardworking Americans to keep more of their earnings by reducing the total income subject to federal tax.
Waiters, bartenders, and other service industry professionals also have a new reason to celebrate this year. You can now deduct up to $25,000 in qualifying tips, effectively lowering your tax bracket. This deduction is available whether you choose to itemize or take the standard deduction, making it accessible to a wide range of workers. By excluding these funds from your taxable total, your final tax refund is likely to be substantially higher than in previous years.
Enhanced Benefits for Seniors and Vehicle Owners
Retirees and older Americans are receiving a significant boost during this 2026 filing period. If you reached the age of 65 by the end of 2025, you are eligible for a new senior bonus deduction of $6,000. For married couples where both spouses are seniors, this extra benefit reaches $12,000. This is an additional amount that sits on top of the standard deduction, providing extra financial support for those on a fixed retirement income.
Vehicle owners also have a unique opportunity to save this season. If you purchased a new vehicle in 2025 that was assembled in the United States, you can deduct up to $10,000 of the interest paid on that auto loan. This provision was created to support domestic manufacturing while helping families manage transportation costs. Additionally, the cap for state and local tax deductions has been raised to $40,000 for many households, offering further relief to those in high tax areas.
Standard Deductions and Limits for 2026
The standard deduction has been adjusted upward to account for inflation and the new legislative changes. The table below provides a quick reference for the amounts you can claim based on your filing status for the 2025 tax year.
| Filing Status | Standard Deduction | New Senior Bonus | Overtime Deduction Cap |
| Single Filers | $15,750 | $6,000 | $12,500 |
| Married Filing Jointly | $31,500 | $12,000 | $25,000 |
| Head of Household | $23,625 | $6,000 | $12,500 |
| Senior (Single 65+) | $21,750 | Included | $12,500 |
Essential Dates for the 2026 Filing Season
Keeping track of the tax calendar is the only way to avoid late fees and ensure your money arrives quickly. The IRS officially opened for return processing this week, and the schedule is now in full swing.
- January 9: IRS Free File opened for early preparation and holding of returns.
- January 26: The official start date for the IRS to process all 2025 tax returns.
- January 31: Deadline for employers to mail W-2 and 1099 statements to their workers.
- April 15: Tax Day, the final deadline to file your return or request an extension.
- October 15: The final deadline for taxpayers who received a six month extension.
Tips for a Faster and Larger Refund
To receive your money in the shortest amount of time, the IRS strongly encourages everyone to use electronic filing and direct deposit. Most people who file an error free return electronically can expect their funds in less than 21 days. The government is continuing to move away from paper checks, so providing your bank details is the most reliable way to secure your tax refund without delay.
If your income was $89,000 or less in 2025, you can use the IRS Free File program to submit your return at no cost. For those with higher incomes, free fillable forms are available on the official IRS website. Remember that even if you choose to file an extension, any taxes you currently owe are still due by the April deadline to avoid interest charges and penalties.
