Millions of Americans who count on their tax refund every spring are being urged to prepare for a major shake up. The Internal Revenue Service expects average refunds to be about 30 percent larger in the 2026 filing season, but most people will no longer receive a paper check in the mail.
On Monday, January 26, the IRS opened the 2026 tax filing season and said it expects about 164 million individual returns before the federal deadline of April 15. The agency is using this milestone year, which includes the 250th anniversary of the United States and the 40th anniversary of electronic filing, to push taxpayers toward a more digital way of filing and getting paid.
Direct deposit replaces most paper refund checks
According to an agency press release, the IRS began phasing out paper refund checks on September 30 of last year after Executive Order 14247 signed by President Donald Trump. Under the new policy, most taxpayers must now provide their bank routing and account numbers so refunds can be sent straight into their accounts by direct deposit.
Direct deposit is also the fastest way to get money back when you have overpaid your taxes during the year. The IRS says that when people file electronically and choose direct deposit, most refunds arrive in less than 21 days, a timeline that can matter when rent, utility bills, or credit card balances are waiting.
Government officials argue that paper checks create extra costs, longer delays, and more risk of fraud or lost payments, especially after mail theft complaints rose during the COVID 19 pandemic. If you still picture a green check arriving in your mailbox, that routine is likely coming to an end.
New OBBBA deductions promise richer refunds
Alongside the payment shift, a package of new tax breaks created under the OBBBA is reshaping who gets what from the tax system. Together with existing credits, these deductions help explain why the government expects average refunds to be roughly one third higher in 2026 than in recent years, even though the exact impact will still depend on each person’s income and family situation.
One major change is a new above the line charitable deduction that lets non itemizers write off up to $1,000 in donations, or $2,000 for joint filers, lowering taxable income even if they do not itemize. Workers who rely on tips and overtime may also claim new deductions of up to $25,000 in qualified tips and up to $12,500 in qualified overtime pay for individuals, or $25,000 for couples, which could ease the tax bite from extra shifts they pick up to make ends meet.
Other provisions focus on big purchases and older taxpayers. Interest on qualified auto loans for new personal use vehicles becomes deductible, seniors get an enhanced $6,000 deduction per eligible taxpayer age 65 or older or $12,000 for couples, and private mortgage insurance becomes deductible again starting in 2026 for returns filed in 2027, changes that could matter for anyone financing a car or paying down a home loan.
What taxpayers should do now
To keep up with the new rules, the IRS is strongly encouraging people to file electronically rather than on paper, echoing the push it made when e filing first rolled out in 1986. In a recent statement, chief executive Frank J. Bisignano said that “while the United States celebrates its 250th anniversary, the IRS and its employees are excited to once again serve American taxpayers as they meet their tax filing obligations during the 2026 filing season,” underlining how central electronic filing and direct deposit have become.
For individual filers, the first step is to gather bank routing and account numbers and make sure they are correct with your bank or credit union before you sit down to file. It also helps to keep records of charitable donations, tip income, overtime hours, car loan statements, and mortgage insurance payments so you can tell whether the new deductions apply when you are working through your return at the kitchen table.
A milestone year for the American tax system
The 2026 filing season lines up with two symbolic anniversaries and a turning point in how the country handles refunds. Between the 250th birthday of the United States and the 40th year of electronic filing, the shift away from paper checks and toward digital payments looks less like a small tweak and more like a lasting reset.
For the most part, taxpayers who adjust early by embracing direct deposit and learning the new deductions stand a better chance of getting their money quickly and in full. Those who wait or ignore the changes could face delays just when they are counting on that refund to plug a gap in the family budget, which makes understanding the new system more than just a technical detail.
The main press release has been published on the Internal Revenue Service official website.
