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March 11, 2026 — The 2026 tax filing season represents one of the most significant shifts in recent memory for tax professionals and their clients. The Internal Revenue Service has confirmed that millions of taxpayers will see meaningful changes in their tax bills and refund amounts this year, driven by the retroactive provisions of the One Big Beautiful Bill Act (OBBB) and annual inflation adjustments.
As tax preparers on the front lines of these changes, National Tax Preparers of America members need to be equipped with the knowledge to maximize client outcomes while ensuring compliance with new requirements.
The Bottom Line: What Clients Want to Know
Your clients will ask one question first: “Will I get a bigger refund?”
The answer, for most, is yes.
According to early estimates, the OBBB will deliver approximately $91 billion in retroactive tax relief for the 2025 tax year, with roughly $60 billion flowing back to taxpayers as increased refunds and $30 billion reducing tax liabilities. Morgan Stanley economists project average refund increases of 15% to 20% compared to previous yearsÂ
For tax preparers, this means:
- Higher client satisfaction as refunds exceed expectations
- Increased complexity requiring careful attention to new forms and eligibility requirements
- Opportunities for advisory services as clients seek to optimize these benefits in future years
Key Provisions Affecting 2025 Returns (Filed in 2026)
1. Enhanced Standard Deduction
The OBBB raised standard deduction amounts for 2025 returns:
| Filing Status | 2025 Standard Deduction |
|---|---|
Single |
$15,750 |
Married Filing Jointly |
$31,500 |
Head of Household |
$23,625 |
Note: These amounts will continue increasing with inflation adjustments for 2026 and beyond
Preparation Tip: Review whether clients who previously itemized might now benefit from the standard deduction, especially with the expanded SALT cap (see below).
2. Increased Child Tax Credit
The Child Tax Credit has been permanently increased to $2,200 per qualifying child under 17, with annual inflation adjustments.
This represents a $200 increase from the previous $2,000 limit.
Critical Note for Preparers: Ensure clients understand this is a credit, not a deduction—meaning it directly reduces tax liability dollar-for-dollar.
3. The “Big Three” New Deductions (Schedule 1-A Required)
The OBBB introduced three significant new deductions that require Schedule 1-A.
| Deduction | Maximum Amount | MAGI Phase-Out Begins |
|---|---|---|
No Tax on Tips |
Up to $25,000 |
$150,000 ($300,000 MFJ) |
No Tax on Overtime |
Up to $12,500 |
$150,000 ($300,000 MFJ) |
Auto Loan Interest |
Up to $10,000 |
$100,000 ($200,000 MFJ) |
Preparation Alert: These deductions have specific documentation requirements. For tip income, ensure clients have accurate records of cash tips. For overtime, verify that hours exceed 40 per week. For auto loan interest, the vehicle must meet specific criteria—check IRS guidance for eligible vehicle definitions.
4. Senior Deduction (Ages 65+)
Taxpayers aged 65 and older may claim an additional $6,000 deduction for tax years 2025 through 2028, subject to phase-outs beginning at $75,000 MAGI ($150,000 for married filing jointly).
Advisory Opportunity: This temporary provision creates a four-year window for retirement income planning. Consider strategies for clients approaching age 65 to optimize the timing of income recognition.
5. Expanded SALT Deduction Cap
For clients who itemize, the state and local tax (SALT) deduction cap has increased to $40,000 for 2025 (up from $10,000), with annual inflation adjustments through 2029.
Strategic Consideration: This change may make itemizing more attractive for higher-income clients in high-tax states. Run both scenarios—standard deduction versus itemized—to determine optimal filing strategies.
6. Adoption Credit Enhancement
The maximum adoption credit increased to $17,280 for 2025, with up to $5,000 now refundable (meaning clients can receive this amount even if it exceeds their tax liability).
Important Limitation: Prior-year carryforwards cannot be used to calculate the refundable portion—only current-year expenses qualify.
Inflation Adjustments: The Quiet Benefits
Beyond the OBBB changes, annual inflation adjustments continue to provide relief:
- Tax bracket thresholds have increased, meaning clients can earn more before hitting higher marginal rates
- Earned Income Tax Credit (EITC) maximums have risen to $8,046 for families with three or more children
- Estate tax exemption increased to $13.99 million for 2025
- Gift tax annual exclusion remains at $19,000 for 2025
New for 2026: Trump Accounts
While not affecting 2025 returns, tax preparers should be aware that Trump Accounts (new investment accounts for children) cannot be funded before July 4, 2026. The federal government will make a one-time $1,000 contribution for eligible children born between January 1, 2025, and December 31, 2028.
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Future Planning Note: These accounts will function similarly to traditional IRAs after the beneficiary turns 18. Consider discussing eligibility with clients who have young children.
Professional Best Practices for This Filing Season
Documentation is Critical
The new deductions require specific substantiation. Create checklists for:
- Tip reporting forms from employers
- Overtime hour documentation
- Auto loan interest statements and vehicle eligibility proof
- Age verification for senior deduction
Schedule 1-A Mastery
This new form is essential for claiming the “Big Three” deductions. Review the IRS instructions thoroughly and consider creating internal worksheets to ensure accurate calculations
Client Communication Strategy
Set clear expectations:
- Refunds may be larger, but processing times could vary as the IRS implements new systems
- Some clients may see reduced withholding in 2026 paychecks due to these changes
- Complex returns may require additional review time
Ongoing Education
The IRS continues releasing guidance on OBBB implementation. Monitor IRS.gov/OneBigBeautifulBill for updates.
Economic Considerations
Some economists have raised concerns about potential inflationary effects from increased refunds . While the National Economic Council has expressed confidence that supply increases will offset demand pressures, tax preparers should be aware that clients receiving larger refunds may have questions about optimal use of these funds.
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Consider offering or partnering with financial advisors to provide holistic guidance on refund utilization—potentially creating additional revenue streams for your practice while serving client needs.
Conclusion
The 2026 filing season offers tax preparers both opportunities and challenges. Clients will benefit from meaningful tax relief, but realizing these benefits requires careful attention to new forms, eligibility requirements, and documentation standards.
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National Tax Preparers of America remains committed to providing our members with the resources and education needed to navigate these changes effectively. The professionals who master these provisions now will build lasting client relationships and position their practices for success in the evolving tax landscape.
