Core Insights - The tax filing season is expected to yield larger refunds for many Americans in 2026 due to the new legislation, potentially increasing average refunds by $1,000 or more, totaling around $90 billion in additional tax returns [1] Changes Impacting Tax Refunds - Overtime hours will not be taxed this year, with a deduction for up to $12,500 of qualifying overtime wages, leading to an average tax cut of $1,400 [2] - The Child Tax Credit (CTC) will increase from $2,000 to $2,200 per child, with phase-out thresholds set at $400,000 for married couples and $200,000 for single filers [3] - A new $6,000 Senior Deduction ($12,000 for married couples) will be available for those over 65, applicable for 2025–2028, with income limits of $75,000 for individuals and $150,000 for couples [4] - Tips will not be taxed this year, allowing those who rely on tips to deduct up to $25,000 from taxable income, with limitations based on income and occupation, expiring after 2028 [5] - The standard deduction has increased to $15,750 for single taxpayers, $31,500 for joint filers, and $23,625 for heads of households, reflecting a 7.9% increase since last year [5]