DMV LOCAL RECAP: IRS Refunds Could Hit $4K, New Tax Breaks for 2026

Taxpayers could see refunds averaging $4,000 this year with new breaks for seniors, car loans, child credits, and tax-free tips and overtime.

Tax season is officially underway, and Americans could see bigger refunds in 2026, with the IRS estimating an average return of around $4,000. That’s an increase of $833 compared to last year’s average of about $3,000.

Several key provisions from the Big Beautiful Bill are making this year’s filing particularly noteworthy. Seniors 65 and older can claim a temporary deduction of up to $6,000, while buyers of new cars assembled in the U.S. may deduct up to $10,000 in interest, a benefit available through 2028.

Families also stand to gain, with the child tax credit rising from $2,000 to $2,200 per child under 17. Eligibility requires both parents to have Social Security numbers and the child to live with the taxpayer for more than half the year.

Arguably the most talked-about provision allows certain Americans to keep more of their hard-earned money by exempting up to $25,000 in tips and $12,500 in overtime from federal taxes.

The IRS recommends filing electronically and opting for direct deposit to receive refunds faster. Taxpayers are encouraged to review their returns carefully to maximize deductions and ensure they’re claiming all eligible benefits. For more details on how to keep more money in your pocket this year tune into the Dominique Da Diva Show.

SEE ALSO