Overview
- Treasury-backed estimates reported this week point to roughly $1,000 larger refunds for 2025 returns, with last year’s average refund around $3,167.
- Key changes include tax-free treatment of up to $25,000 in tips and up to $12,500 in overtime for eligible filers, a deduction of up to $10,000 in interest on loans for new U.S.-assembled vehicles, a higher $40,000 SALT cap, a child tax credit raised to $2,200, and a new seniors deduction up to $6,000.
- Benefits are narrowly targeted and phase out at defined income thresholds, and experts warn many filers—especially those without eligible tips or overtime—may see smaller gains than the $1,000 average.
- Claiming several new breaks requires the newly introduced Schedule 1-A, and the IRS is phasing out most paper refund checks in favor of direct deposit, with some reporting forms still being updated for tip-related changes.
- As filing begins, IRS Criminal Investigation reports identifying $4.5 billion in tax fraud in fiscal 2025 and urges taxpayers to use vetted preparers and guard against scams.