Many taxpayers may see larger refunds when filing 2025 taxes in 2026 due to the One Big Beautiful Bill Act (OBBBA), which reduced individual tax burdens. Key changes include higher standard deductions ($31,500 for married joint), an increased $2,200 child tax credit, and new tax breaks for tips, overtime, and seniors.
Tax changes for 2025, largely driven by the "One Big Beautiful Bill" (OBBBA) Act, introduce significant deductions for seniors, tips, overtime, and auto loan interest, expand the Child Tax Credit, and raise the SALT deduction cap to $40,000, while making several 2017 Tax Cuts and Jobs Act provisions permanent, including the seven tax brackets. Key changes include a $2,200 Child Tax Credit, a $6,000 senior deduction, deductions for qualified tips and overtime, and a permanent standard deduction increase.
Under the new income tax regime for 2025-26, any taxable income up to ₹12,00,000 attracts a full rebate of ₹60,000 (under Section 87A), resulting in a nil tax liability.
Some of the major tax changes effective from April 1, 2025, are revised tax slabs, rebate of up to Rs. 60,000, revised ITRU deadlines, calculation of partner's remuneration allowable as a deduction and revised TDS/TCS threshold limits. What is the Rebate available under section 87A?
The Central Board of Direct Taxes has decided to further extend the due date for filing these ITRs for AY 2025-26 from 15 September 2025 to 16 September 2025 and ITR filing last date for FY 2025-26 (AY 2026-27) is Friday, 31 July 2026.
If you're 65 or older now, you can claim an additional deduction of up to $6,000 on your 2025 federal income tax return. Eligible married couples who are both 65 and older can claim up to $12,000 for an additional deduction.
During the 2025 tax filing season, the IRS issued more than 93.5 million tax refunds to individual income tax filers, and 93% of those, almost 87 million refunds, were issued through direct deposit. Only 7 percent of individual refund recipients received their refunds by check through the mail.
Rebate Limits for Each Year:
FY 2023-24 (AY 2024-25) onwards: As per the new tax regime, the rebate limit was changed to ₹25,000 for those with taxable income up to ₹7 lakh. Meanwhile, the old tax regime remained the same at ₹12,500 for those with an income of up to ₹5 lakh.
Thanks to the Working Families Tax Cuts, over the next few months Americans are estimated to receive $91 billion in additional tax refunds, part of an expected record $370 billion refund season, a 26% increase over last year.
There's no benefit to waiting to file your 2025 taxes on Tax Day, April 15, 2026. There are many benefits to filing your taxes early, however. Benefits include receiving your tax refund sooner, avoiding penalties and long lines, and keeping your identity safer from fraud.
No, the IRS is not issuing new $1400 stimulus checks; the final pandemic-era payments for the Recovery Rebate Credit (the third stimulus) were sent out by early 2025 to eligible people who missed them by filing their 2021 return by the April 2025 deadline. While payments were made in late 2024 and early 2025, that was the final opportunity, and any current claims of new stimulus checks are likely scams or misinformation, as Congress has not approved any new federal stimulus programs.
Tax Foundation estimates the OBBBA reduced individual taxes by $129 billion for 2025, and outside estimates suggest up to $100 billion of that could be received as higher refunds this filing season, pushing average refunds up by up to $1,000.
The IRS $600 rule refers to a change in reporting requirements for third-party payment apps (like Venmo, PayPal) for taxable income from goods and services, where platforms must send a Form 1099-K if you receive over $600 in a year, intended to capture gig economy/side hustle income, though delays and phased implementation have adjusted the timeline, with current rules for 2024 using a higher threshold ($5,000) before fully phasing to $600 for future years, but remember all taxable income, regardless of form, must always be reported.
For the 2025 tax year (filing in 2026), key U.S. tax breaks include a higher standard deduction, an enhanced Child Tax Credit, new deductions for tips, overtime, and auto loan interest, plus an extra deduction for seniors (65+). A significant boost for some filers is the increased State and Local Tax (SALT) deduction cap to $40,000, making it easier to deduct property and income taxes. These changes stem from new legislation, the "One Big Beautiful Bill," that also makes the 2017 tax brackets permanent.
A recent tax law ("One Big Beautiful Bill") introduced a new $6,000 bonus deduction for Americans aged 65 and older, available for tax years 2025-2028, reducing taxable income, not the tax itself, with income phase-outs starting at $75,000 MAGI for singles and $150,000 for joint filers. This deduction adds to existing standard deductions, provides up to $12,000 for couples, and requires a Social Security number and filing status other than Married Filing Separately.
Income Tax Act, 2025 to be effective from April 1, 2026. The Act simplifies language, removes obsolete provisions and consolidates and restructures provisions. It Introduces concept of 'Tax Year' replacing 'Assessment Year' and 'Previous Year'.