New IRS rules may lead to higher tax refunds for some people, but they may also cause confusion as taxpayers adjust to the changes. The new rules will affect 2025 federal income tax returns, USA Today reported.

As the new guidelines take effect, tax refunds could increase by as much as $1,000 for some people. This means some taxpayers may receive an average of $4,151, CBS News reported. For the 2025 filing season, the average tax refund amounted to $3,151.

“When people go to file, they’ll be surprised by really, really large refunds,” Don Schneider, deputy head of U.S. policy at Piper Sandler, said in a recent podcast, according to CBS News. “In a typical year, we might have about $270 billion in tax refunds, and it’ll be that plus another $90 billion.”

What are the new IRS rules for tax returns?

The 2025 IRS guidelines include deductions for tip income and overtime pay, as well as car loan interest and tax breaks for people who are 65 and older. However, with the new tax breaks imposing restrictions for some, this could lead to confusion and delays in sending payments.

Taxpayers must now file a new Schedule 1-A form to get tax breaks for overtime pay, tips, senior benefits and car loans. This form was available only as a draft online in December.

The IRS no longer sends paper checks to most taxpayers. People who previously chose to receive a paper check may now have to get their refund through direct deposit. Those who don’t have a bank account can use prepaid debit cards or digital wallets. 

“Only 7% of individual refund recipients received their refunds by check through the mail,” the IRS said, according to USA Today.

When does tax season start in 2026?

The IRS hasn’t announced an official start date for the 2026 tax season. However, the agency said the date may be announced soon.

“We expect to have a ‘Go Live’ date any time now,” Mark Steber, chief tax officer for Jackson Hewitt Tax Services, told USA Today.

The IRS kicked off the 2025 tax season on Jan. 27, but financial experts are expecting a slightly delayed start in 2026. CPA George Smith in Bloomfield Hills, Michigan told USA Today that this year’s tax season may start during the week of Feb. 2.