IRS Opens 2026 Tax Season Amid New Laws, Record Refund Outlook

WASHINGTON (Azat TV) – The Internal Revenue Service (IRS) officially began accepting 2025 tax returns on Monday, January 26, 2026, marking the start of the 2026 tax filing season. This year’s season is particularly notable for the implementation of new tax laws under the recently enacted One, Big, Beautiful Bill Act (OBBBA) and an anticipated surge in average tax refunds, potentially setting new records for many American households.

The 2026 Filing Season Commences

IRS Chief Executive Officer Frank Bisignano affirmed the agency’s readiness for the filing season, stating, “The Internal Revenue Service is ready to help taxpayers meet their tax filing and payment obligations during the 2026 filing season.” He further noted that IRS information systems have been updated to efficiently process returns incorporating the new tax laws.

Employers were required to provide W-2 forms, detailing wages and tax withholdings from the previous year, to employees by January 31. Most workers receive these forms by early February, as the information on the W-2 is crucial for filing federal and state income tax returns.

The standard federal tax return due date is Wednesday, April 15, 2026. This is the final day to file federal income tax returns with the IRS and remit any outstanding tax payments without incurring penalties. Taxpayers needing more time can file for an extension by April 15, pushing their filing deadline to October 15, 2026. However, any tax owed must still be paid by the April 15 deadline to avoid interest and penalties.

Understanding New Tax Laws and Deductions

This filing season is the first to reflect the comprehensive changes introduced by the One, Big, Beautiful Bill Act (OBBBA), signed into law last summer. Key modifications aim to provide relief and new deductions for various taxpayers:

• Married couples where both spouses qualify can now deduct up to $12,000.
• Eligible workers can claim new deductions for qualified overtime pay, tips, and car loan interest. The overtime deduction is capped at $12,500 per return, or $25,000 for joint filers, with the benefit phasing out at higher income levels.
• Taxpayers claiming these new deductions for seniors, tips, and overtime pay will utilize the new Schedule 1-A form when preparing their 2025 returns.
• The law temporarily raises the cap on the state and local tax (SALT) deduction, allowing some higher-income filers in high-tax states to deduct more on their federal returns.

For eligible taxpayers, IRS Free File opened on January 9, offering guided software from private-sector partners to those with an adjusted gross income of $89,000 or less. Other options include paid tax software, professional preparers, and IRS-certified volunteer programs.

Tracking Your Refund and Expected Windfalls

Many Americans are anticipated to receive larger tax refunds this year. Treasury Secretary Scott Bessent confirmed in December that an estimated $100 billion to $150 billion in refunds is expected to be distributed, averaging between $1,000 and $2,000 per household. This projection suggests 2026 could deliver the largest average tax refunds on record.

Taxpayers can easily track the status of their refunds using the “Where’s My Refund?” tool on IRS.gov or through the IRS2Go mobile app. To check the status, individuals need to enter their Social Security or individual taxpayer ID number (ITIN), filing status, and the exact refund amount from their return.

The tool provides three primary statuses: “Return Received,” indicating the IRS has received and is processing the return; “Refund Approved,” meaning the IRS has approved the refund and is preparing to issue it by a specified date; and “Refund Sent,” confirming the refund has been dispatched to the taxpayer’s bank account or via mail. The IRS typically processes most refunds for e-filed returns within 21 days, while mailed returns may take six weeks or more.

Strategic Use of Your Tax Refund

With the prospect of significant refunds, financial experts are encouraging Americans to consider strategic uses for their unexpected windfalls. An industry association leader, Cadin, emphasized the importance of creating a holistic financial plan. He noted that while many businesses will encourage spending on cars, home improvements, or travel, a more beneficial approach involves consulting with a financial advisor to develop a long-term strategy.

Cadin highlighted that two-thirds of Americans currently do not work with an advisor or have a written financial plan. Recent Finseca research indicated that common barriers to seeking financial advice include not knowing how to get started (31%), perceiving it as too expensive (19%), and the belief that advice is exclusively for the wealthy (15%). Cadin argued that this season’s larger refunds present an “enormous opportunity” for individuals, especially those living paycheck to paycheck, to engage with financial professionals and establish a roadmap for managing risk, planning for retirement, and building overall financial success.

The combination of the IRS’s streamlined processing capabilities, new tax legislation offering expanded deductions, and the projection of record-high refunds creates a unique financial landscape for American taxpayers this year. This environment not only facilitates easier filing but also presents a significant opportunity for individuals to leverage their refunds for long-term financial stability and growth, rather than immediate consumption, underscoring the broader economic impact of tax policy and personal financial planning.