It’s officially tax time. You have probably received several tax documents by now, and the thought of getting everything together to file your tax return can be daunting.
Well, here’s some extra motivation. You may get more back, or pay less this year that in previous years, thanks to the One Big Beautiful Bill signed into law last July.
The Tax Foundation estimates that the average refund could be up to $1,000 higher this year.
Here are 5 changes that could benefit you.
Higher Standard Deduction 2026: $31,500 Married Filing Jointly
Number One: The standard deduction is higher. According to the IRS, more than 90% of taxpayers use the standard deduction, mostly because they don’t have enough itemized deductions that would exceed the standard deduction amount. The new law raised the standard deduction from $21,200 to $31,500 for married filing jointly, and from $14,600 to $15,750 for single filers. The law will raise it again in 2027.
New $6,000 Senior Deduction for Taxpayers 65 and Older
Number Two: If you are 65 or older, there is a new, additional deduction that you will get to stack on top of your standard deduction. The new law creates a deduction of $6,000 per person for you. It is based on income though. It phases out if your modified adjusted gross income is over $150,000 for joint filers, and $75-thousand for single filers. Also worth noting, the additional senior deduction ends in 2028.
SALT Deduction Cap Increased to $40,000
Number Three: You may be able to deduct more of your state and local tax payments. There was a cap on that deduction of $10-thousand. It has been raised to $40-thousand. This will benefit residents of high tax states, but you will have to itemize to get this deduction. And it won’t benefit higher earners. The new $40-thousand cap is reduced for those who earn over $500-thousand for married joint filers.
Car Loan Interest Deduction Up to $10,000 in 2025
Number Four: If you bought a new vehicle in 2025, you may be able to deduct the interest you paid on your loan. The new law allows you to deduct up to $10-thousand dollars of car loan interest, and you don’t have to itemize deductions to take advantage of this, but there are some requirements to qualify, and one of the biggest is you don’t have taxable income over $150,000 filing single, or $250,000 married filing jointly.
IRS Withholding Tables Not Updated: Bigger Refund Potential
Number Five: Your employer may have withheld too much from your paycheck. The IRS did not update withholding tables after the Big Beautiful Bill was signed into law. So, some taxpayers became eligible for additional deductions but were still paying more per paycheck. That could create a bigger refund.
Bottom line, if you do get a fatter tax refund this year, now is the time to make a plan for what you will do with it. Use the money wisely. Lump sums are great catalysts for your path to financial independence, if you put it work for you.
Securities are offered through LPL Financial, Member FINRA/SIPC. GenWealth Financial Advisors is an other business name of Independent Advisor Alliance, LLC. All investment advice is offered through Independent Advisor Alliance, LLC, a registered investment adviser. Independent Advisor Alliance, LLC is a separate entity from LPL Financial.
