In the United States, many taxpayers may find themselves receiving larger refunds this filing season, thanks to expanded deductions introduced under last year’s major tax reforms. Experts suggest these changes could significantly lower taxable income for certain workers, seniors, and buyers, potentially leading to larger refund amounts.
“There’s so much good news in the new year because you’re going to see the biggest tax refund season of all time,” said Kevin Hassett, Director of the National Economic Council, during an appearance on Fox News Channel’s Fox News Sunday on December 21st. His comments echoed those made by former President Trump in December.
The updated tax law broadens deductions across several taxpayer categories. The Internal Revenue Service (IRS) has indicated that early filing data shows refunds are trending higher this season.
Mark Steber from Jackson Hewitt Tax Service shared with KGW News that these reforms represent the most significant shift in tax policy he has observed in decades. “We are not only expecting bigger refunds, but a lot bigger refunds,” he noted.
Workers in the service industry are set to benefit from a new deduction on qualified tip income. Eligible taxpayers can now deduct up to $25,000 in reported tips, reducing their taxable income and possibly increasing their refunds.
This change could significantly impact bartenders, servers, and hospitality workers, many of whom rely heavily on tips for their income.
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Employees who worked additional hours may also be able to claim extra savings. The new law allows for a deduction of up to 12,500 dollars on overtime earnings for eligible workers, providing relief for those who put in considerable overtime throughout the year.
Taxpayers who purchased a vehicle assembled in the United States in 2025 may qualify for an interest deduction. Buyers with qualifying auto loans can deduct up to 10,000 dollars in loan interest, even if they do not itemise their deductions.
Americans aged 65 and older can claim an additional 6,000 dollars deduction, or up to 12,000 dollars for married couples filing jointly. This provision was designed to help ease the tax burden many seniors face, particularly those who pay taxes on Social Security benefits.
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According to early IRS filing data, average refunds are running about 14 per cent higher than at the same time last year, suggesting that these expanded deductions are already affecting returns.
Tax professionals are advising taxpayers to carefully review their eligibility or consult with an expert to ensure they are claiming all the deductions available to them. However, not all taxpayers will see a boost. The majority of the benefits are concentrated among middle and upper middle income households, those earning between 50,000 dollars and 400,000 dollars . Some lower-income households may experience little change or even a slight decrease due to cuts in other social programs.