Here’s why your tax refund may be bigger than expected this year
The 2026 tax filing season has officially opened, and this year, your refund check may be bigger than you expect.
In 2025, the average refund was $3,167, according to the Internal Revenue Service (IRS). This year, the U.S. Treasury says Americans can expect an average of $1,000 more on their refunds.
What’s different this year?
Millions of taxpayers are expected to see increased refunds this year because of President Donald Trump’s sweeping “One Big Beautiful Bill Act” (OBBB). It increased both the standard deduction and the child tax credit.
The OBBB also created several new deductions for tips, overtime and auto loan interest. There will also be a larger deduction for seniors ages 65 and older — $6,000 — and a higher cap on state and local tax (SALT) deductions.
Additionally, it adds a provision to the adoption tax credit that makes it partially refundable for up to $5,000. Some adoption groups estimate the average cost of adoption ranges from $40,000 to $50,000.
Another reason your tax refund could be bigger is the new tax brackets implemented under the OBBB. It made the 10%-37% rates permanent while raising the income thresholds for each bracket. For example, in 2024, a single filer eligible for the lowest tax rate of 10% earned $0-$11,600 annually. That was raised to $11,925 in 2025.
Here’s a big driver behind why refunds may be larger than normal: Experts say many people did not change the tax withholding on their paychecks to account for the change in tax brackets. So while a person’s tax liability may have gone down, their holdings didn’t.
“As a result, the ‘extra’ tax benefit shows up as a refund rather than increased take-home pay,” Tom O’Saben, director of tax content for the National Association of Tax Professionals, told CNN.
Unbiased. Straight Facts.TM
About 70% of American taxpayers qualify to use the IRS Free File tool.
Potential complications
Since the OBBB is relatively new, having just been signed into law in July, there are some potential complications that could impact your pocketbook. Chiefly, the IRS is still working to finalize specific rules related to some of the new deductions.
When it comes to tips and overtime deductions, many employers haven’t provided their employees with the information they need to claim them, according to the Bipartisan Policy Center. The federal government has, however, put out guidance for those eligible to claim the deductions.
The IRS is also facing budget and personnel constraints. Federal News Network reports that in 2025, the IRS lost more than 25% of its workforce to the Trump administration’s voluntary separation incentives, including early retirement offers and the deferred resignation program.
Right now, the agency is still operating under the 2025 fiscal year budget as part of the continuing resolution put in place to end the recent government shutdown. However, under the bipartisan agreement for fiscal year 2026 that’s currently making its way through Congress, funding for the IRS would be cut by 9%, or $1.1 billion.
How to get your money
This year, taxpayers will have one less tool at their disposal when it’s time to file. The Direct Filing tool, which was available in multiple states for the past two tax seasons, is no longer being offered.
That means eligible taxpayers will have to rely on IRS Free File, while others must use for-profit services or volunteer services. The IRS website says Free File can be used for those with an adjusted gross income of $89,000 or less.
The federal government has also started phasing out paper checks, so it’s urging everyone to opt for direct deposit to receive their refund.
“Combining direct deposit with electronic filing is the fastest way to receive your refund,” the IRS said.
The post Here’s why your tax refund may be bigger than expected this year appeared first on Straight Arrow News.
Ella Rae Greene, Editor In Chief
