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Trump Promised 'Biggest Tax Refund Ever' But You May Have Had To File Differently

Major tax changes taking effect in 2026 could boost refunds for millions, but only if filers understand how the new rules work.

By Josh Koebert , Edited by Becca Borawski Jenkins

Updated Aug. 21, 2026

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If you received a larger-than-expected tax refund this year, you may be wondering if you filed correctly. The changes stem from the One Big Beautiful Bill Act (OBBBA) passed last year. Supporters argue certain tax changes will help you keep more of what you earn, though the details matter. For many households, the size of a refund may depend on how you filed your return.

Here's what taxpayers should know about filing extensions or filing for the next tax year, so you can keep more cash in your wallet.

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How to get a bigger tax refund under new IRS rules

Several provisions in the One Big Beautiful Bill Act may increase refunds for eligible taxpayers, particularly those with wages tied to tips, overtime, or higher deductions. According to the nonpartisan Tax Foundation, the average filer could see refunds rise by roughly $300 to $1,000 compared with the previous year.

That increase assumes taxpayers actively claim deductions they qualify for and file accurately. Many of the new benefits have income caps, making careful preparation essential.

It's also important to note that, in addition to certain tax law changes, the IRS is also moving away from paper checks as part of a broader federal effort to modernize payments. Under a recent executive order, most government payments will shift to electronic delivery, with limited exceptions. To receive a refund as quickly as possible, the IRS recommends choosing direct deposit when filing. Paper checks could result in longer processing times, especially during peak filing season.

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New standard deduction limits

The standard deduction increased again for the 2026 filing season, reducing taxable income for millions who do not itemize. Single filers and married individuals filing separately can now deduct $16,100, which is $350 more than the prior year. Married couples filing jointly receive a deduction of $32,200, reflecting a $700 increase.

Higher standard deductions can automatically lower tax bills, but they may also reduce the advantage of itemizing. Taxpayers should still compare both options to determine which yields the lowest overall tax liability.

No tax on tips

Workers in occupations that traditionally rely on tipping may see meaningful relief under the new rules. From 2025 through 2028, eligible employees and self-employed individuals can deduct qualified tips received from customers, including shared tips. The deduction is capped at $25,000 per year and applies only to jobs the IRS has designated as customarily receiving tips.

This benefit phases out once modified adjusted gross income (MAGI) exceeds $150,000 for single filers or $300,000 for joint filers. Tips must still be reported as income, but the deduction can significantly reduce the amount of that income that is taxed.

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No tax on overtime

Overtime pay also receives favorable treatment under the updated law. Taxpayers may deduct the portion of overtime compensation that exceeds their regular hourly rate, such as the additional "half" in time-and-a-half pay. The annual deduction is limited to $12,500 for single filers and $25,000 for joint filers.

To qualify, overtime earnings must be properly reported on a W-2, 1099, or similar statement. Similarly, this benefit also phases out once MAGI exceeds $150,000 for single filers or $300,000 for joint filers.

New SALT deductions

The cap on state and local tax (SALT) deductions increased substantially for those who itemize. Eligible taxpayers can now deduct up to $40,000 in state and local taxes, or $20,000 if married filing separately. This represents a sharp jump from the previous $10,000 limit.

The expanded deduction phases out for taxpayers with MAGI above $500,000, or $250,000 for separate filers. Residents of high-tax states may benefit the most from this change, particularly homeowners with significant property tax bills.

New senior deduction

Older Americans received an additional tax break under the legislation. From 2025 through 2028, individuals age 65 and older can claim an extra $6,000 deduction on top of the existing senior standard deductions. Married couples may deduct up to $12,000 if both spouses qualify.

This deduction begins to phase out at a MAGI of $75,000 for individuals and $150,000 for joint filers. For retirees on fixed incomes, the added deduction can meaningfully reduce taxable income.

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Why claiming deductions matters

The expanded deductions only help if taxpayers actively claim them. Each provision has specific eligibility rules, income thresholds, and documentation requirements. Missing even one deduction could result in paying more tax than necessary.

Working with a tax professional or using reputable tax software can help ensure all applicable benefits are included and correctly reported.

Bottom line

The 2026 tax season introduces expanded deductions that could push refunds higher for many households, particularly workers, seniors, and residents of high-tax states. While the IRS has made changes to simplify some aspects of filing, the growing number of deductions makes accuracy more important than ever.

Understanding which provisions apply to your situation, adjusting how you file, and planning ahead may help you get ahead financially while taking full advantage of the latest tax law changes.

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