You Can Start Filing Your Taxes on January 26 as the IRS Faces Cuts
The 2026 filing season is about to begin, and the IRS has set January 26 as the first day taxpayers can submit their 2025 returns. The agency expects about one hundred sixty-four million filings this year, similar to last year’s total but arriving with a new twist as updated tax rules take effect and the IRS operates with a smaller workforce.
The IRS enters the season with fewer employees after tens of thousands left through layoffs and buyouts tied to the Department of Government Efficiency. The National Taxpayer Advocate’s June report highlighted the decline from more than one hundred thousand workers at the end of the Biden administration to just over $75,000.
Tax Changes
Several provisions from President Donald Trump’s tax and spending package, passed last summer, apply retroactively to the 2025 tax year. The IRS has already updated its forms and guidance to reflect those revisions. Because withholding tables were never adjusted in 2025, many workers may see larger refunds when they file.
Updated tax brackets and new withholding tables will roll out later in 2026. Tax analysts say the changes may result in slightly bigger paychecks once new withholding rules take effect, although inflation may temper how noticeable the adjustments feel.
Paper refund checks are being phased out, with direct deposit now the primary option for faster payments. IRS Direct File will not operate this year, though Free File remains available for households with adjusted gross income under $84,000.
Deductions to pay attention to
Several new deductions tied to the 2025 tax year may boost refunds:
- A deduction for seniors
- A deduction for tips
- A deduction for overtime
- A deduction for car loan interest
Tax experts caution that some of these benefits have limits. For example, the tip deduction applies only to the first $25,000 of qualified tips.