“If you find a path with no obstacles, it probably doesn’t lead anywhere.” —Frank A. Clark
Maybe you’ve seen the headlines about 2026 being the ‘biggest tax refund season ever.’
I always balk a little at those claims. Promising payouts to the public isn’t my idea of responsible tax guidance. Besides, a refund is only your change. The IRS does not give you money back because they like you. They give you money back because you gave them too much in the first place.
However, this year, there is some substance to that claim of greater refunds. This year, average refunds could be 300 dollars to 1K higher than in previous years.
So, what’s driving that increase?
1. OBBBA tax breaks. Regardless of what was cut to create these tax breaks, or who benefits the most from them, it is true that deductions for overtime pay and tip income, a new deduction for seniors, car loan interest deductions, a higher standard deduction, and a major expansion of the state and local tax (SALT) deduction cap are all possible things that could reduce your taxable income (if you qualify).
2. Withholding. The OBBBA was signed into law in July 2025. But a lot of its provisions apply retroactively to income earned starting January 1, 2025.
The IRS didn’t update federal withholding tables after the law passed, so it’s likely if you’re a W-2 employee, that you continued with the withholding you had set up before those deductions existed.
Which means you might not have realized a portion of your income was deductible until filing time. In that case, the refund is the correction.
Now, usually, as I note above a large refund isn’t something you want.
Because it means you overpaid and effectively gave the government an interest-free loan throughout the year.
That’s money you could have used throughout the year for other things — knocking down debt, building savings, or funding retirement accounts, to name a few.
And over time, consistently large refunds usually point to withholding or estimated payments that need adjustment.
This year, a bigger refund is simply going to be how the government delivers new tax cuts.
Retroactive law changes, new deductions, and refundable credits like the 2.2K Child Tax Credit or the 5K Adoption Credit can all legitimately drive larger refunds.
The real question isn’t if your refund could be bigger this year, but why.
So make sure your withholding is set correctly for this year. If you’re not sure what your withholding should look like or how you can adjust things to fully capture the benefits of new tax legislation, grab an appointment on our calendar.
Because a larger refund can be a good outcome when it’s on the IRS’s dime, but you also don’t want to let them sit on your hard-earned money all year.