Tax filing season is in full swing, and while preparing your taxes can often be filled with stress, misplaced documents, and worries about proper filing, this year, there may be a silver lining. According to analysts, many Americans may get larger refunds in 2026 due to Trump’s 2025 One Big Beautiful Bill legislation. Most Read from Fast Company Last year, the average refund was $3,167, but, given there are a number of new changes and deductions, experts say many Americans are looking to get back an add ...

Tax credits are the best way to keep more of your money come April 15 because — unlike deductions, which only reduce your taxable income — they lower your bill on a dollar-for-dollar basis. Even better, you get cash back from the credits that are refundable or partially refundable once your tax bill falls to zero. However, some of the best tax credits are easy to miss. Some people mistakenly assume you have to itemize to claim all of them. Others leave money on the table over confusion about phaseouts. ...

Tax changes, big and small, are coming in 2026. New tax rules were signed into law as part of the 2025 Reconciliation Legislation, also known as the Big, Beautiful Bill (BBB). This sweeping legislation will impact taxpayers, especially the middle class, who may see shifts in everything from income-tax brackets to popular deductions and credits. According to experts, here’s what may be changing, what’s staying the same and moves middle-class taxpayers can make to make sure they stay middle class. What M ...

Core Insights - Understanding tax deductions and tax credits is essential for effectively reducing tax liabilities and maximizing savings [1] Tax Credits - A tax credit provides a dollar-for-dollar reduction of the tax owed, directly lowering the tax bill [2] - Refundable tax credits can result in a refund if they exceed the tax liability, while nonrefundable credits can only reduce the tax bill to zero without generating a refund [3][4] - Eligibility for tax credits is determined by specific qualifications related to income and tax filing status, with common credits available for low to moderate income individuals, small business owners, and families [5][7] - Popular tax credits include the child tax credit and the earned income tax credit, which assist families and low-income earners [9] - Education credits such as the American Opportunity Tax Credit and Lifetime Learning Credit provide financial relief for educational expenses, with the former being refundable up to $2,500 per student [10][11] - Healthcare credits like the Premium Tax Credit help low- to moderate-income families cover health insurance premiums purchased through the marketplace [15][16] Tax Deductions - Tax deductions reduce taxable income rather than the tax bill directly, with the impact depending on the taxpayer's tax bracket [17] - Deductions can be classified as above-the-line or itemized, with above-the-line deductions applicable even if the standard deduction is claimed [18][19] - Common above-the-line deductions include self-employment expenses, while itemized deductions encompass student loan interest, medical expenses, and charitable donations [20][26] - Taxpayers must ensure that itemized deductions exceed the standard deduction to effectively minimize tax liability [24] Interaction of Tax Credits and Deductions - Tax credits and deductions can be used in conjunction to lower overall tax liabilities, with tax credits providing more direct financial benefits [30][31] - For example, a taxpayer with an income of $100,000 could reduce their taxable income through deductions and further lower their tax bill with applicable tax credits [28][29]