With an eye on the next tax season, U.S. taxpayers are preparing for a filing period marked by major changes, stemming from new legislation and the usual inflation adjustments. The filing window with the Internal Revenue Service (IRS) opened on January 26, 2026, with Wednesday, April being the deadline for most.
Those who request an automatic extension will have until October 15, though it’s crucial to remember that estimated tax payments remain due in April—a detail that often leads to confusion and potential late fees.
The IRS Just Quietly Changed the Rules on Tax Refunds
The refund process also has its own specifics. Refunds that include the Earned Income Tax Credit or the Additional Child Tax Credit will not begin to be issued before March 2, 2026. This measure, designed to allow the IRS to conduct more thorough verification and prevent fraud, applies as long as the return is filed electronically and does not require additional review.
Generally speaking, the tax administration processes most refunds within 14 to 21 days when electronic filing is combined with direct deposit. However, taxpayers who opt for a physical check (in super-strict exceptions) or whose returns are complex may experience longer delays.
Experts like Michael Shapiro, a certified public accountant with three decades of experience, emphasize the importance of meticulously verifying documents such as W-2 and 1099 forms. “A typo in a Social Security number or income amount can halt the automated process, sending the return to manual review, which adds weeks, if not months, to the wait,” Shapiro warns.
Inflation Adjustments and Updates to Deductions
As happens every year, the deduction thresholds and tax brackets undergo revisions to counteract the effects of inflation, a mechanism known as “indexing”. For the 2025 tax year, which is filed in 2026, the standard deduction will increase.
Single taxpayers and married couples filing separately will be able to deduct $16,100. For couples filing jointly and qualifying widows or widowers, the amount rises to $32,200, while heads of household will have a standard deduction of $24,150.
Your Tax Bracket Might Feel Different in 2026
The tax bracket structure is also being modified. The top marginal tax rate of 37% will apply to taxable income exceeding $640,600 for single individuals. For joint returns filed by married couples, that limit is set at $768,600. Other key credits and exemptions are also being updated.
The Earned Income Tax Credit will reach a maximum value of $8,231 for families with three or more dependent children. At the same time, the Alternative Minimum Tax exemption is set at $90,100 for individual filers and $140,200 for couples filing jointly.
The Permanent Impact of the “OBBA Act”
The most transformative development, however, stems from the legislation known as “One Big Beautiful Bill Act” (OBBBA), enacted in July 2025. This law introduces substantial changes to the tax code, with one key consequence: making permanent most of the individual tax cuts from the 2017 Tax Cuts and Jobs Act, which were originally set to expire at the end of 2025.
This action by Congress prevents the automatic increase in tax rates that was scheduled, providing long-term predictability that analysts say could influence the financial planning of millions of households.
The “SALT Cap” Increase Nobody Is Talking About Yet
Among its most discussed provisions, the OBBBA establishes taxable income exclusions for specific categories of workers. Under its terms, tip and overtime income will be exempt from withholding and reporting, beginning in tax year 2025. However, this provision is subject to qualification criteria that the IRS must define in specific guidelines, so experts recommend waiting for this clarification before assuming that these income items will not be reported.
The law also strengthens support for families and senior citizens. The Child Tax Credit increases by $200, from $2,000 to $2,200 for each qualifying child. In addition, a new deduction is created for taxpayers age 65 and older, capped at $6,000 for individual returns and $12,000 for qualifying joint returns, subject to limits based on adjusted gross income.
For those who choose to itemize their deductions, the OBBBA has some important news. The State and Local Tax (SALT) deduction, whose limit had been a source of controversy, has had its cap increased. For the 2025 tax year, the limit rises to $40,000 and will be subject to inflation adjustments for the following four tax years. The law also permanently eliminates the “Pease cap,” a mechanism that gradually reduced the benefit of itemized deductions for high-income taxpayers.
The Expected 2026 Tax-Breaking Refunds
From the word on the streets, and from what officials from the IRS say, for the 2026 tax season the average refund should land somewhere between $3,800 and $4,000. That’s a pretty solid jump, about a thousand bucks more than last year’s average of around $3,000.
The main driver behind the bump is the new tax perks from the OBBBA law, because of all the aforementioned changes and new guidlines.
