Individuals and businesses are preparing for the upcoming tax-filing season with new tax breaks that could lead to larger refunds and reduced bills. The changes stem from the One Big Beautiful Bill Act passed in July 2025.
The IRS tax deadline for filing 2025 individual returns for most people is April 15. On average, people are expected to save nearly $3,000 in 2026, with about 85% of households getting a tax cut. Companies and small businesses will get extended tax cuts, though amounts may vary.
Bria Harris, owner and CEO of Impress Tax Service, spoke about strategies as filing begins on Jan. 26. Harris is a certified tax expert with a doctorate and 10 years of experience.
She stated that many Americans may receive larger federal refunds this year. Analysts estimate the average refund could be about $1,000 higher, with total refunds nationwide potentially tens of billions of dollars more than last year.
A significant portion of the boost may come from enhancements to the child tax credit, now up to $2,200 per qualifying child, and the earned income tax credit, up to about $8,231 for families with three or more children. Not everyone will qualify. Harris says eligibility depends on income, filing status, SSN requirements, and whether each taxpayer meets the rules for the credits.
To maximize benefits, she suggested taxpayers review eligibility for expanded credits, adjust withholding early, and file electronically with direct deposit for faster refunds. When filing returns this year, individuals should confirm they are using updated standard deduction amounts for 2025 returns: $15,750 for singles, $31,500 for married filing jointly, and $23,625 for head of household. Those deductions directly lower taxable income.
Harris explained that seniors and those who are blind may qualify for additional deductions, including a new $6,000 senior bonus deduction. When filing with a professional tax office and answering all questions accurately, tax software will automatically apply eligible credits and deductions.
On the "no tax on tips" and "no tax on overtime" provisions, she says not all occupations will benefit equally. The tip deduction mainly applies to workers in jobs that customarily and regularly receive voluntary tips, such as servers, bartenders, hotel staff, valets, taxi drivers, hairstylists, barbers, nail techs, massage therapists, entertainers, and delivery workers. The overtime deduction is broader and based on whether an employee receives qualified overtime pay under federal wage rules, not on occupation, so many hourly workers across industries may benefit.
Even if someone doesn’t qualify for the tip or overtime benefits, they may still see tax savings from the higher standard deduction and expanded credits if eligible. Under recent tax law updates, Harris says the adoption tax credit for 2025 and beyond has been expanded and is now partially refundable. It allows qualifying families to receive up to $17,280 per eligible child, with up to $5,000 potentially refundable, even with little or no tax liability. "This update helps make adoption more affordable by increasing direct tax savings and the chance of a larger refund at filing time."
However, the credit is subject to income phase-out limits, so higher-income taxpayers may see it reduced or eliminated. Families must meet strict eligibility rules, including adopting an eligible child and having properly documented qualified adoption expenses. "Because the rules are detailed and income-sensitive, taxpayers should review their situation with a professional to ensure they maximize the credit correctly."
For individual taxpayers, Harris says maximizing retirement contributions is one of the smartest ways to lower your tax bill now while building long-term wealth. Contributions to a traditional 401(k) or traditional IRA are made pre-tax, directly reducing taxable income for the year. Roth contributions don’t lower taxes today but allow earnings to grow tax-free.
She recommended taxpayers try to contribute as much as possible, review income limits for Roth eligibility and IRA deductions, and use credits like the Saver’s Credit when eligible. For business owners, Harris says one of the most powerful tax moves right now is offering or contributing to employees’ 401(k) or IRA plans. They can generate tax credits for startup plans, employer contributions, and auto-enrollment, while also allowing employer contributions to be fully deductible as a business expense.
She advises that companies should also evaluate capital purchases and investments for benefits like Section 179 expense and bonus depreciation. It allows them to deduct large amounts of equipment and asset costs upfront instead of over time. Qualifying R&D expenses may generate valuable credits, and expanded business interest deductions can further reduce taxable income. "Strategic tax planning before year-end helps businesses lower current tax liability, improve cash flow, and create long-term tax efficiency for future years."