WASHINGTON, D.C. — The Internal Revenue Service is rolling out one of the most sweeping tax-season overhauls in years as the 2026 filing season opens later this month, bringing new deductions, digital reporting rules, and a dramatic shift away from paper refund checks.
The IRS announced that the nation’s 2026 filing season will officially begin Monday, January 26, giving taxpayers just over two months to prepare their 2025 federal returns before the April 15 deadline. The agency expects to receive about 164 million individual tax returns, with most Americans filing electronically.
At the center of this year’s changes is the One, Big, Beautiful Bill, the sweeping tax law passed in July 2025 that delivers several new deductions designed to put more money back in taxpayers’ pockets. Beginning this year, filers will use a new Schedule 1-A to claim deductions such as “no tax on tips,” “no tax on overtime,” “no tax on car loan interest,” and an enhanced deduction for seniors.
“These provisions could have a significant effect on federal taxes, credits and deductions,” the IRS said, urging taxpayers to review the changes now before filing season hits full speed.
The IRS is also urging taxpayers to create or log into their IRS Individual Online Account, which provides 24-hour access to balances, payments, tax records, and secure communication with the agency. Officials say online accounts are now a cornerstone of faster refunds and better identity protection.
A major shift is also coming to how refunds are delivered. Under President Trump’s executive order, Modernizing Payments To and From America’s Bank Account, the IRS is phasing out paper refund checks. Taxpayers are being strongly encouraged to open a bank account and use direct deposit to receive refunds faster and more securely.
Families will also see a brand-new option for saving for their children. Parents and guardians can now open Trump Accounts, a new retirement-style savings vehicle for children under 18 with a valid Social Security number. As part of a pilot program, eligible U.S. citizens born between January 1, 2025, and December 31, 2028, will receive a $1,000 contribution. Details are available at trumpaccounts.gov.
Digital income is under sharper scrutiny this year. All income from gig work, payment apps, and online sales remains taxable, and payment processors will issue Form 1099-K when transactions exceed $20,000 and 200 payments for the year. Cryptocurrency, stablecoins, and NFTs must also be reported, with some taxpayers receiving the new Form 1099-DA from brokers.
Treasury and the IRS also released proposed regulations clarifying that third-party payment networks are not required to perform backup withholding unless those same $20,000 and 200-transaction thresholds are crossed. Officials stressed that while reporting thresholds have changed, all income remains taxable.
“President Trump is committed to the taxpayers of this country and improving upon the successful tax filing season in 2025,” said Acting IRS Commissioner Scott Bessent, calling the new law a boost for working families and businesses alike. IRS Chief Executive Officer Frank Bisignano said agency systems have been fully updated to handle the new rules.
Taxpayers can track their refunds through the “Where’s My Refund?” tool on IRS.gov, which typically updates within 24 hours after e-filing. The IRS is also warning filers to be alert for scams and identity theft, offering guidance online for prevention and recovery.
Free filing options are expanding as well. IRS Free File opens January 9 for eligible taxpayers, while Free File Fillable Forms will be available starting January 26 for filers of any income level. Military members and some veterans can use the Defense Department’s MilTax program, and IRS-certified volunteers will provide no-cost preparation through the Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs.
With new deductions, new digital rules, and new savings tools, the IRS is urging taxpayers to get ready now — because this filing season promises to look very different from any before it.
For the latest news on everything happening in Chester County and the surrounding area, be sure to follow MyChesCo on Google News and MSN.