WASHINGTON, Jan 7, 2026, 07:22 EST
The U.S. Internal Revenue Service is urging taxpayers to prepare early for the 2026 tax season, pointing to new tax-law changes that may lift some refunds and a push toward electronic payments as paper refund checks are phased out. 1
Why it matters now: the filing season for 2025 returns is weeks away, and refund size and timing will shape household cash flow at a moment when many workers are still learning the rules tied to new deductions and credits. The House Ways and Means Committee has cited a Piper Sandler analysis projecting refunds could rise by about $1,000 per return on average next year, while cautioning outcomes will vary by income and filing status; “withholding,” the tax taken out of paychecks, is also a swing factor. 2
The IRS faces operational strain as it heads into the season, raising the risk of delays. Janet Holtzblatt at the Tax Policy Center wrote that “taxpayers might want to lower their expectations and prepare for unanswered phone calls to the IRS and delays in tax refunds,” citing staffing cuts, leadership gaps and the recent government shutdown. 3
Key dates are also tightening. Employers must give workers their 2025 Form W-2 — the wage and tax statement used to file returns — by Feb. 2, 2026, the IRS tax calendar shows. For most individual filers, the deadline to file a 2025 federal return falls on April 15, 2026, with a six-month extension available through Form 4868, though taxes owed are generally still due by the April deadline. 4
How refunds arrive is changing as well. The IRS said paper refund checks for individual taxpayers are being phased out beginning Sept. 30, 2025 under an executive order, steering most refunds to direct deposit or other electronic methods; the agency said paper checks are far more likely to be lost, stolen or delayed. The IRS also said electronic refunds are typically issued in less than 21 days for e-filers who choose direct deposit and have no issues with the return, while mailed refunds can take six weeks or longer. 5
Several provisions in President Donald Trump’s “One Big Beautiful Bill” are set to reshape how some filers calculate tax on 2025 income, with knock-on effects for refunds. The law exempts taxes on up to $25,000 in tipped income and up to $12,500 in overtime pay through 2029, both phasing out above $150,000 of income, Reuters has reported. It also creates a new deduction of up to $6,000 for people 65 and older, lifts the cap on the state and local tax (SALT) deduction — taxes paid to state and local governments — from $10,000 to $40,000 through 2029, and adds a deduction for up to $10,000 of auto-loan interest on U.S.-assembled vehicles through 2029. 6
