WASHINGTON, MARCH 30, 2026 —
What You Need To Know
- The One Big Beautiful Bill Act created four brand-new deductions for your 2025 return — tips, overtime, car loan interest, and a senior bonus — that millions of Americans are missing entirely
- The Tax Foundation estimates average refunds will be $300 to $1,000 higher this filing season because the IRS did not adjust withholding tables when the new law passed — meaning most Americans overpaid taxes throughout 2025
- You have until April 15 at midnight to make a 2025 IRA contribution and claim the deduction on this year’s return — one of the most powerful last-minute refund boosters available
Tax Day is April 15. You have 16 days. And this year, thanks to the most significant tax law changes since 2017, millions of Americans are sitting on refund money they do not know how to claim — or do not know exists at all.
The One Big Beautiful Bill Act, signed into law on July 4, 2025, did not just extend existing tax cuts. It added four entirely new deductions that appear on a brand-new form — Schedule 1-A — that most Americans have never seen before. It raised the standard deduction. It increased the Child Tax Credit. It expanded the SALT deduction cap to $40,000. And because the IRS did not update withholding tables in time to reflect all of these changes, most workers had too much money taken out of their paychecks throughout 2025.
The result is a filing season unlike any in recent memory — one where the average refund is expected to run $300 to $1,000 higher than a typical year. But only for Americans who know what to claim. Here is exactly what that means for your return.
The Four New Deductions Most Americans Are Missing
All four new deductions from the One Big Beautiful Bill are claimed on the new Schedule 1-A — a form that did not exist before this filing season. If your tax software or preparer has not asked you about any of these four items, you may be leaving significant money on the table.
| New Deduction | Who Qualifies | Maximum Deduction | Income Limit |
|---|---|---|---|
| No Tax on Tips | Workers in tipped occupations | $25,000 | MAGI under $150K single / $300K joint |
| No Tax on Overtime | Workers who received time-and-a-half pay | $12,500 single / $25,000 joint | MAGI under $150K single / $300K joint |
| Car Loan Interest | New U.S.-assembled vehicle purchases | $10,000 | Income limits apply |
| Senior Bonus Deduction | Americans aged 65 and older | Additional standard deduction | Phases out above $75K single / $150K joint |
The tip deduction is one of the most broadly impactful for working Americans. Bartenders, servers, hotel housekeepers, hair stylists, valets, casino workers — any worker in an occupation the IRS has designated as customarily receiving tips can deduct up to $25,000 in tip income from their 2025 federal taxes. The IRS had not enforced occupation limitations for the 2026 filing season, meaning the definition of who qualifies is currently broader than it will be in future years.
The overtime deduction targets the “half” in time-and-a-half pay — the premium above your regular hourly rate. If you worked overtime in 2025, the extra portion of that pay — up to $12,500 for single filers — is now deductible. The Tax Policy Center estimates approximately 17 million American workers will benefit from this deduction, with an average tax cut of $1,400.
The Standard Deduction Increase You May Have Missed
Even Americans who claim none of the four new deductions are getting a larger refund this year — because the standard deduction itself was permanently increased under the One Big Beautiful Bill.
| Filing Status | 2024 Standard Deduction | 2025 Standard Deduction | Increase |
|---|---|---|---|
| Single | $14,600 | $15,750 | +$1,150 |
| Married Filing Jointly | $29,200 | $31,500 | +$2,300 |
| Head of Household | $21,900 | $23,625 | +$1,725 |
Since roughly 90% of American taxpayers claim the standard deduction rather than itemizing, this increase flows directly to the bottom line for most filers. At the 22% tax bracket — the most common bracket for middle-income Americans — the increase in the standard deduction for a married couple translates to approximately $506 in additional tax savings.
The Last-Minute Move That Could Boost Your Refund Today
One of the most powerful and most underused tax strategies available right now costs nothing except a decision. You have until April 15, 2026 to make a contribution to a Traditional IRA for the 2025 tax year — and deduct it on your 2025 return.
The 2026 IRA contribution limits are $7,500 for Americans under 50 and $8,600 for Americans 50 and older. For a single filer in the 22% tax bracket who contributes the full $7,500, that contribution generates a $1,650 reduction in federal tax liability — delivered as either a higher refund or a lower payment due. The contribution reduces your income for 2025 even though the money goes into your account in 2026. And unlike most tax moves, you can make it right now — today, this week, up until the filing deadline.
If you have a workplace 401(k) with employer matching that you have not fully used, increasing your contribution rate for the remainder of the year does not affect your 2025 return — but starting the habit now means 2026’s return will be stronger. Employer matching is, by definition, the highest guaranteed return available to any investor — 50 to 100 cents on every dollar contributed, before a single market gain.
The Credits That Pay You Back Even If You Owe Nothing
Tax deductions reduce your taxable income. Tax credits do something more powerful — they reduce your actual tax bill dollar for dollar. Refundable credits go further still: they can pay you money even if your tax liability is zero.
| Tax Credit | 2025 Amount | Who Qualifies |
|---|---|---|
| Earned Income Tax Credit — no children | $664 | Low-moderate income workers |
| EITC — one child | $4,427 | Families with qualifying children |
| EITC — two children | $7,316 | Families with two qualifying children |
| EITC — three or more children | $8,231 | Families with three or more children |
| Child Tax Credit | $2,200 per child | Families with children under 17 |
| Saver’s Credit | Up to $2,000 joint | Retirement savers under income limit |
| Energy Efficiency Credit | 30% of qualifying costs | Home improvement for energy efficiency |
| Adoption Credit | Up to $17,280 | Families who adopted in 2025 |
The EITC is one of the most valuable credits in the tax code — and one of the most frequently unclaimed. The IRS estimates that one in five eligible Americans fails to claim the Earned Income Tax Credit every year. If your income is below approximately $67,000 for a family with three or more children — or lower thresholds for smaller families — you may qualify for a credit worth thousands of dollars that gets added directly to your refund.
The SALT Deduction Change That Matters for High-Tax States
For Americans who itemize — particularly homeowners in high-tax states like California, New York, New Jersey, and Illinois — the One Big Beautiful Bill’s increase to the SALT deduction cap is the single most financially significant change in this filing season. The cap on deductible state and local taxes was raised from $10,000 to $40,000, effective for 2025. For a homeowner in New York or California paying $25,000 or more in state income and property taxes, this change unlocks tens of thousands of dollars in previously ineligible deductions — shifting the math firmly in favor of itemizing over the standard deduction.
What Most Filers Miss
Point 1: The Health Savings Account deadline is April 15, just like the IRA. If you have a high-deductible health plan, you can contribute to an HSA for 2025 until the filing deadline — reducing your taxable income by up to $4,300 for individuals or $8,550 for families. HSA contributions are triple tax-advantaged: deductible going in, tax-free growing, and tax-free coming out for qualified medical expenses.
Point 2: Education costs frequently go unclaimed. The Lifetime Learning Credit allows you to claim 20% of up to $10,000 in qualified education expenses — a maximum credit of $2,000 per return — for any courses taken at an eligible institution, not just degree programs. Working adults taking professional development courses or graduate classes often qualify without realizing it.
Point 3: If you installed solar panels, a heat pump, energy-efficient windows, or other qualifying home improvements in 2025, the Energy Efficient Home Improvement Credit covers 30% of the cost — up to applicable limits per improvement type. A $20,000 solar installation generates a $6,000 credit. Any portion unused in 2025 carries forward to your 2026 return.
Your Next Move
Open your tax software or call your preparer today — not next week. Ask specifically about Schedule 1-A and whether you qualify for the tip deduction, overtime deduction, car loan interest deduction, or senior bonus deduction. Check whether you are eligible for the EITC. Confirm that your standard deduction reflects the new 2025 amounts. And if you have not yet made your 2025 IRA contribution, do it before April 15.
The average American refund this filing season is expected to run $300 to $1,000 higher than usual. The difference between getting that money and leaving it with the IRS is knowing what to claim — and claiming it before April 15 at midnight.
📌 Read Next:
- Tax Day 2026: Everything Americans Need to Know Before the April 15 Deadline
- How to Avoid an IRS Audit in 2026 — What Actually Triggers One
