With tax filing season underway, new tax laws could mean bigger refunds for millions of people this year.
"We do see that people will receive up to $1,000 more in their refund this year or lower balance due," said Lisa Greene-Lewis, CPA and tax expert with Intuit TurboTax.
If you want a boost, there's still time for last-minute moves to cut your tax bill and end up with more money in your wallet.
Watch as tax experts show how to maximize your refund:
Tax law changes and how they impact you:
Tax filers are expected to receive larger refunds thanks to a number of changes to the tax code under the One, Big, Beautiful Bill Act.
No tax on tips and overtime:
"The thing you hear the most is no tax on tips," said Roy Mitchell, CPA and partner with Kunimura Mitchell & Co.
If you earn qualified tips, as a beautician, rideshare driver or server, for example, workers can deduct up to $25,000. The deduction phases out for taxpayers with modified adjusted gross income over $150,000.
"And then if you're a service worker like a police officer or firefighter, you can deduct up to $12,500 in overtime," Greene-Lewis said.
Both deductions are effective through 2028.
Higher standard deduction:
Mitchell said millions of filers will benefit from a higher standard deduction this year.
"The standard deduction has been adjusted for inflation," Mitchell said.
But always do the math before taking the standard deduction. If you own a home, itemizing could mean more money back with a higher cap on state and local tax (SALT) deductions.
"Individuals can now deduct up to $40,000 for state and local taxes," Mitchell said. "The itemized deductions consist of mortgage interest, real estate taxes, those SALT taxes as well as charitable contributions."
He recommends running the numbers both ways to see which method offers a larger refund.
Higher child tax credit:
The child tax credit helps families with qualifying children get a tax break. This isn’t new, but it is getting better this year.
"It used to be $1,700. Now it is going up to $2,200," Mitchell said.
To qualify for the 2025 tax year, the child must have been under 17 at the end of the tax year and have lived with you for more than half the tax year.
New deduction for seniors:
Mitchell said he anticipates that seniors age 65 and older will pay lower taxes this year thanks to a new deduction of up to $6,000.
"A lower tax liability and assuming withholdings and estimated taxes are comparable, then yes," he said.
The deduction, however, is phased out for higher earning seniors.
No tax on car loan interest:
Now through 2028, drivers can deduct interest paid on a loan used to purchase a qualified vehicle.
Eligible vehicles must be purchased new for personal use, and their final assembly needs to have occurred in the U.S.
The maximum annual deduction is $10,000.
Maximize your refund:
To maximize your tax refund before April, Greene-Lewis advises taxpayers not to rush, but don't procrastinate either.
"People that wait until last minute, they tend to leave important receipts out for deductions and credits they're eligible for," Greene-Lewis said.
Before you file, max out deductions you control such as:
- Contributions to a traditional IRA or HSA
- Eligible self-employment expenses
- Educator deductions
- Student loan interest deductions
Greene-Lewis recommends having all documents and identifiable information in order before you file.
"Kids are worth valuable deductions and credits, but you need the accurate social security number to claim those," she said.
Lastly, if you’re unsure how new tax laws impact you, seek help from a qualified tax professional.
"We're totally up to date with the new tax laws. Whether you choose to do it yourself or have a tax expert fully do your taxes for you, we'll make sure that you're getting the maximum refund you deserve," Greene-Lewis said.
Don’t delay. Uncle Sam could be bringing an extra bonus this tax season, so you don’t waste your money.
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