Full Breakdown
2026 Tax Filing Season: Key Changes and Expectations
1/10/2026, 11:18:31 PM
Overview of the 2026 Tax Filing Season
The Internal Revenue Service (IRS) will begin accepting federal income tax returns for the 2025 tax year on January 26, 2026. This tax season is marked by significant changes due to the One Big Beautiful Bill Act, which introduced new deductions and altered existing tax provisions. Taxpayers are advised to prepare early to navigate these changes effectively.
Major Changes in Tax Deductions
The One Big Beautiful Bill Act has expanded several key tax deductions, which may impact refund amounts for many taxpayers. Notable changes include:
- Expanded State and Local Tax (SALT) Deduction: The cap on SALT deductions has increased from $10,000 to $40,000 for many filers, benefiting those with significant state and local tax payments.
- No Tax on Tips: Taxpayers can now deduct up to $25,000 in qualified tip income, applicable for tax years 2025 through 2028, with phase-outs for higher earners.
- No Tax on Overtime: Taxpayers can also deduct up to $12,500 in qualified overtime pay, which similarly phases out at higher income levels.
- Senior Deductions: Taxpayers aged 65 and older can claim additional deductions of up to $6,000 for individuals or $12,000 for qualifying couples.
These changes are expected to increase refunds for many, particularly retirees relying on Social Security.
Refund Timing and IRS Challenges
While many taxpayers anticipate larger refunds, the IRS has cautioned that processing delays may occur due to staffing shortages and the complexity of implementing new tax provisions. Taxpayers filing electronically can expect refunds within 10 to 21 days after submission, but those claiming the Earned Income Tax Credit (EITC) or Child Tax Credit (CTC) may face delays of up to a month as the IRS verifies eligibility.
Official Statements & Responses
Experts emphasize the importance of understanding the new tax laws. Adam Brewer, a tax law expert, noted, “A lot of these changes sound great, but you may not actually qualify or the savings may be limited.” Lisa Greene-Lewis, a CPA at Intuit TurboTax, highlighted the necessity of having accurate Social Security numbers for claiming deductions related to children.
Criticism & Opposition
Concerns have been raised regarding the IRS's capacity to manage the increased workload from the new tax laws. Lawmakers and watchdogs warn that the combination of new deductions and staffing shortages could lead to longer wait times for refunds. George Conboy, chairman of Brighton Securities, stated, “Every taxpayer’s refund will depend on their unique situation. There’s no single number you can rely on.”
What's Next
Taxpayers are encouraged to file early and seek professional guidance to maximize their deductions and ensure compliance with the new tax laws. The IRS will continue to update forms and instructions throughout the filing season, and taxpayers should remain vigilant about potential changes that may affect their returns.
Verbatim Quotes
- “You definitely want to keep in mind, like if you’re a beautician or an aesthetician that you may fit into one of those professions that are eligible for that new deduction for tips,” — Lisa Greene-Lewis, CPA
- “A lot of these changes sound great, but you may not actually qualify or the savings may be limited,” — Adam Brewer, AB Tax Law
- “Every taxpayer’s refund will depend on their unique situation,” — George Conboy, Chairman of Brighton Securities
As the 2026 tax season approaches, understanding these changes will be crucial for taxpayers aiming to optimize their refunds while navigating potential delays.
