IRS Makes Move to Help Millions of Taxpayers

Tax season is in full swing, with the April 15 filing deadline one month away. If you haven't filed your taxes yet, there's still plenty of time, and a new update from the IRS could make the process easier.

Recently, the organization updated its Tax Withholding Estimator, which provides citizens with the chance to estimate how much tax money should be withheld during the year.

What to know

The Tax Withholding Estimator is open to anyone holding a job with an employer (W-2) or who has a pension or annuity with federal income tax withholding.

Individuals using the calculator will need their most recent paystubs for jobs, pensions or annuities, while couples filing jointly will need their spouse's as well.

If you have additional income sources or think you might itemize deductions, you'll also need your most recent federal tax return, payment records for self-employment or social security and records of any expenses you plan to deduct.

The process usually takes about 25 minutes, the IRS estimates.

IRS announced major changes to deductions thanks to new law

The One, Big, Beautiful Bill Act (OBBB) was signed into law on July 4, 2025, affecting tax deductions and credits for millions of American workers and retirees.

Among the changes that were implemented:

• Increased Standard Deduction
• No Tax on Tips
• No Tax on Overtime
• No Tax on Car Loan Interest
• Deductions for Seniors

The full IRS and US Treasury Department guidelines pertaining to the OBBB and tax filing can be found here.

What can Americans expect?

Preliminary reports indicate the average tax refund so far is $3,700, with millions of Americans potentially qualifying for an additional $775 refund based on the new laws.

“Given all the tax credits and deductions made under the One Big Beautiful Bill Act, there's little surprise Americans are on average seeing higher tax refunds this year," said Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, in a recent interview with Newsweek. "Most of the boost is coming from reductions on taxation over tips and overtime under certain amounts, and the senior tax credit, all of which are adding to the refunds taxpayers typically see this time of year.”

However, Beene warns that Americans must "keep realistic expectations" before filing their faxes.

“At the same point, a higher refund is not guaranteed, and for tens of millions who have yet to file, they need to make sure they run the numbers on their personal tax situation before celebrating a larger refund that may not come," he explained.