Mark your calendars: January 26, 2026, marks the official start of tax season, and this year could deliver the largest refund windfall in American history. The IRS announced it expects to receive approximately 164 million individual income tax returns, with taxpayers projected to receive a combined $370 billion in refunds—including an additional $91 billion attributable to new tax breaks enacted under President Trump's One, Big, Beautiful Bill.

Key Dates for the 2026 Tax Season

Here's what every taxpayer needs to know about the critical deadlines:

  • January 9, 2026: IRS Free File opened for taxpayers with adjusted gross income of $84,000 or less
  • January 26, 2026: IRS begins accepting all individual tax returns
  • April 15, 2026: Filing deadline for 2025 tax returns and payment of any tax due

Taxpayers who file electronically and choose direct deposit can expect refunds in as little as 21 days. That means early filers who submit returns on January 26 could see money in their accounts by February 16, assuming no issues with their returns.

New Tax Breaks That Could Boost Your Refund

This is the first filing season reflecting changes from the One, Big, Beautiful Bill, which introduced several new tax deductions that could significantly increase refund amounts for millions of Americans:

No Tax on Tips

Service industry workers—including waiters, bartenders, hotel staff, and delivery drivers—can now exclude tip income from federal taxation. For a server earning $30,000 in tips annually, this could mean thousands in tax savings.

No Tax on Overtime

Overtime pay is now deductible from federal income taxes, providing relief for workers who put in extra hours. Manufacturing workers, nurses, and others who regularly work overtime could see substantial refund increases.

No Tax on Car Loan Interest

In a move designed to support working families, interest paid on car loans is now deductible. With the average new car loan carrying over $40,000 in principal, this deduction could be worth hundreds of dollars annually for many taxpayers.

Enhanced Deduction for Seniors

Taxpayers age 65 and older receive an additional standard deduction increase, providing extra tax relief for retirees on fixed incomes.

How to Claim the New Deductions

Taxpayers will use the new Schedule 1-A to claim the recently enacted deductions for tips, overtime, car loan interest, and the enhanced senior deduction. The IRS has updated its Free File software and tax preparation partnerships to accommodate these new forms.

"This is the biggest tax refund season in American history, thanks to the Working Families Tax Cuts," said House Ways and Means Committee Chairman Jason Smith. "Families can expect an average of $1,000 more in their refund compared to last year."

Who Benefits Most?

The new tax breaks are designed to provide the most relief to working and middle-class families:

  • Service industry workers: The tip exclusion provides immediate relief for approximately 4 million tipped workers
  • Hourly employees: Workers in manufacturing, healthcare, and construction who regularly earn overtime will see significant savings
  • Commuters: The car loan interest deduction benefits anyone financing a vehicle, particularly in areas with limited public transportation
  • Seniors: The enhanced deduction provides additional relief for the approximately 55 million Americans over age 65

Tips for Maximizing Your Refund

Tax experts recommend several strategies to ensure you receive the maximum refund you're entitled to:

File Electronically

Electronic filing reduces errors and dramatically speeds up processing time. Paper returns can take weeks longer to process.

Choose Direct Deposit

Refunds delivered via direct deposit arrive faster than paper checks. You can split your refund across multiple accounts, including retirement savings.

Gather Documentation Early

For the new deductions, you'll need records of tip income, overtime pay, and car loan interest paid during 2025. Request your Form 1098 from your auto lender if you haven't received it by late January.

Use IRS Free File

Taxpayers with adjusted gross income of $84,000 or less can use IRS Free File partners at no cost. This threshold covers the majority of American households.

When to Expect Your Refund

The IRS provides refund status information approximately 24 hours after e-filing a current-year return. You can check your refund status through the IRS "Where's My Refund?" tool on IRS.gov or through the IRS2Go mobile app.

Typical refund timelines:

  • E-filed returns with direct deposit: 21 days or less
  • E-filed returns with paper check: 4-6 weeks
  • Paper returns: 6-8 weeks or longer

What This Means for the Economy

The projected $370 billion in refunds represents a significant injection of consumer spending power into the economy during the first quarter. Historically, tax refunds drive increased spending on big-ticket items, debt reduction, and savings—all of which support broader economic growth.

For many families, the tax refund represents the single largest check they'll receive all year. The additional $91 billion from new tax breaks could provide meaningful support for household budgets still adjusting to post-pandemic inflation.