Americans Are Set to Receive the Biggest Tax Refund in Years — Will Filing Early Result in a Bigger Payout?

Changes to tax policies under the One Big Beautiful Bill Act are set to deliver an extra $60 billion (£43.8 billion) in refunds to Americans compared to last year — an increase of 18%, according to Piper Sandler's Don Schneider.

The average refund increase for individual filers is expected to be between $700 and $1,000 (£511 and £730). Tax experts believe that filers can potentially boost their refunds further by leveraging new deduction opportunities introduced this year.

Many have wondered whether filing taxes earlier results in higher refunds. However, tax professionals have confirmed that filing early does not lead to a larger payout.

'The whole processing is done by computerised systems. There isn't a way to flood the system early, and the IRS will miss things, and you'll get more money back by filing early. That's a big myth that's out there and easily debunked,' said Tom O'Saben of the National Association of Tax Professionals.

Insights Into New Tax Rules and Benefits

The deadline for filing federal taxes this year is Wednesday, 15th April. Among the major changes to tax rules are increased deductions for seniors over the age of 65. They can now deduct an additional $6,000 (£4,382) from their taxable income, on top of the standard deduction.

For those opting for the standard deduction, refunds are expected to be a few hundred dollars higher than in previous years. The standard deduction for individuals has increased to $15,750 (£11,503) from $15,000 (£10,955). For couples filing jointly, it has risen to $31,500 (£23,006) from $30,000 (£21,910). Additionally, the child tax credit has increased to $2,200 (£1,606) from $2,000 (£1,460), benefiting the majority of filers.

Parents can also open 'Trump accounts' for babies born in 2025, with the US Treasury seeding each account with $1,000 (£730). These funds will be invested and accessible when the child turns 18.

Furthermore, car owners can deduct up to $10,000 (£7,303) spent on auto loan payments if the vehicle was manufactured in the US in 2025 and purchased new. While electric vehicle tax credits were removed under the new laws, Americans who bought an EV before 30th September 2025 can still claim the credit.

High-income individuals residing in states with high taxes will benefit from a significant increase to the state and local tax deduction cap, now raised to $40,000 (£29,214) from $10,000.

Navigating Benefits Can Be Challenging

Tax experts warn that these new rules can be complex and overwhelming. They emphasise the importance of carefully reading instructions and understanding the changes to tax forms to ensure they maximise their benefits.

O'Saben also advised that filers verify their Social Security numbers to ensure accuracy, which helps to facilitate smooth processing. He recommends opting for direct deposit to receive refunds promptly, as paper checks can take up to 12 weeks to arrive.

The professional urged taxpayers to use tax filing software rather than paper returns. 'Don't do paper returns, because you can actually eliminate those simple errors that we all make,' he explained. 'Putting a number on the wrong line, math errors, simple things that can be avoided with the software that does a double check and suggests information.'