Tax Refunds Rise 11% Under One Big Beautiful Bill Act

Average tax refunds have increased by over 11% this year. This rise is driven by the One Big Beautiful Bill Act, which allows taxpayers to claim more deductions. The Act creates deductions of up to $25,000 on cash tips for single taxpayers with a modified adjusted gross income of up to $150,000 and joint filers with up to $300,000, with a phaseout of $100 for every $1,000 of income above those caps. Single taxpayers can claim up to $12,500 on overtime, while joint filers can claim up to $25,000, subject to the same income caps and phaseout. Filers can also claim deductions of up to $10,000 on auto loan interests for U.S.-produced vehicles purchased between Dec. 31, 2024, and Jan. 1, 2029. The standard deduction has risen to $15,750 for single taxpayers and $31,500 for joint filers, increases of $750 and $1,500 respectively. The child tax credit has increased by $200 to $2,200. Up to $5,000 of the adoption credit is now refundable. Taxpayers 65 and older can file for a deduction of up to $6,000 until Jan. 1, 2029. The One Big Beautiful Bill Act enabled these changes.