MarketMoodz
2026 tax season opens; 164 million returns may yield bigger refunds
The 2026 tax season opened on Jan. 26, 2026, as filers confront the aftereffects of President Trump’s 2025 tax-law changes. With about 164 million returns expected before the April 15 deadline, many taxpayers could see bigger refunds thanks to the higher standard deduction and withholding non-updates. The open season underscores how policy shifts continue to shape cash outcomes for households.
Key Takeaways
- About 164 million individual returns are expected before April 15, 2026.
- Average refund for 2025 filers was $3,052 through Oct. 17, according to IRS data.
- The 2025 standard deduction rose to $15,750 for single filers and $31,500 for married couples.
- The 2025 child tax credit increased to $2,200 for eligible families.
- IRS withholding tables were not updated after the 2025 changes, potentially boosting 2026 refunds.
People Involved
- Andrew LautzDirector of Tax Policy, Bipartisan Policy Center
- Garrett WatsonDirector of Policy Analysis, Tax Foundation
- Donald J. TrumpPresident
Entities Involved
- Bipartisan Policy CenterPolicy think tank and research organization
- Tax FoundationPolicy think tank and research organization
- Internal Revenue Service (IRS)U.S. federal tax collection agency
MarketMoodz Analysis
For investors, a larger refund season can support consumer spending and credit markets, as households regain purchasing power from tax year 2025 gains. The combination of a higher standard deduction and a lag in withholding updates means refunds at scale may surprise some filers, influencing short‑term cash flow and tax‑driven consumer behavior.
Context from Tax Foundation and Bipartisan Policy Center suggests refunds will vary by income and deductions, but the majority of filers stand to benefit from the expanded standard deduction. The 2025 law also made most 2027 tax breaks permanent, creating a degree of policy continuity that reduces near‑term uncertainty while expanding eligible deductions and credits.
What to watch next includes the IRS’s official withholding adjustments and the actual refund data for 2026, which will test early forecasts. Keep an eye on any policy shifts in Congress that could alter deductions or credits and on how employers implement the 2025 rules in payroll systems.
Source: Original Article
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