The 2026 tax filing season has arrived, bringing some of the most substantial updates to the tax code in decades. Following the passage of the One Big Beautiful Bill Act last year, the landscape for American taxpayers has changed to include expanded deductions that could lead to significantly higher refunds. Whether you work a standard job, earn tips, or are enjoying retirement, these new rules are designed to keep more money in your pocket. The IRS has updated its systems to handle these changes, and taxpayers can now prepare for a season that offers unique relief for overtime workers and seniors alike.
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New Tax Relief for Overtime and Tip Income
One of the most talked about features of this year is the introduction of deductions for qualified overtime and tip income. For the first time, workers who put in extra hours can deduct a portion of that overtime pay from their federal taxable income. This deduction is capped at $12,500 for individuals and $25,000 for married couples filing jointly. Similarly, those in the service industry can now deduct up to $25,000 in qualifying tips. These provisions mean that the hard work you did in 2025 could result in a much lower tax bill when you file this month.
Enhanced Benefits for Seniors and Homeowners
Retirees have a lot to look forward to this season with the introduction of a new senior bonus deduction. If you were 65 or older by the end of 2025, you can claim an additional $6,000 deduction on top of the existing standard amounts. For married couples where both spouses qualify, this bonus jumps to $12,000. Additionally, the law has introduced a deduction for interest paid on personal auto loans for U.S. assembled cars, capped at $10,000. These updates are specifically aimed at helping households manage rising costs while maintaining their standard of living.
Important Deadlines for the 2026 Tax Season
Staying on top of the IRS calendar is essential to avoid penalties and ensure your refund is processed quickly. While some systems are already open for preparation, the official processing dates are firm.
- January 9: IRS Free File opened for taxpayers to begin preparing and holding their returns.
- January 26: The official start date when the IRS begins processing all 2025 tax returns.
- January 31: The final date for employers to mail out W-2 and 1099 statements to workers.
- April 15: Tax Day, the deadline to file your return or submit an extension request.
- October 15: The final deadline for those who requested a six month extension earlier in the year.
Changes to Free Filing and Digital Refunds
There is a significant change in how people file for free this year as the IRS Direct File pilot program has ended. However, the traditional IRS Free File program is still available for those with an adjusted gross income of $89,000 or less. For those who earn more but are comfortable doing their own math, the IRS offers free fillable forms starting on January 26. To get your money as fast as possible, the government continues to phase out paper checks in favor of direct deposit. Most electronic filers can expect their funds in less than 21 days if they avoid common errors.
2026 Tax Season Quick Reference Table
| Filing Category | 2025 Standard Deduction | New Senior Bonus | Overtime Deduction Cap |
| Single Filers | $15,750 | $6,000 | $12,500 |
| Married Filing Jointly | $31,500 | $12,000 | $25,000 |
| Head of Household | $23,625 | $6,000 | $12,500 |
| Senior (Single 65+) | $23,750 | Included | $12,500 |
