IRS Tax Refund: IRS Tax Refund: Income Tax Return projected higher, key forms, deductions, tax credits – how to avail these

The IRS Tax Refund is ongoing, and last year the average refund was $3,167. This year, analysts estimate that figure could be $1,000 higher thanks to changes in the tax code. More than 165 million individual income tax returns were processed last year, and 94 percent of them were filed electronically. The basic IRS Tax Return forms are: W-2 forms if you are employed, 1099-G forms if you are unemployed, and 1099 forms if you are self-employed.

There are new deductions this year that taxpayers should be aware of due to the Republican tax and spending bill that President Donald Trump signed over the summer.

These include no tax on tips, no tax on overtime, deductions on vehicle loan interest, and deductions for people aged 65 and over as of December 31.

Standard Deduction

The standard deduction for single taxpayers is $15,750 this year. If married couples file jointly, that figure rises to $31,500. The standard deduction for heads of household is $23,625.

State and Local Tax (SALT) Deduction

The deduction limit on state and local taxes increased from $10,000 to $40,000. The change is also known as the Working Families Tax Cut and goes into effect in July 2025. The maximum annual deduction is limited to $2,500. The deduction will phase out for taxpayers with modified adjusted gross income over $150,000 or $300,000 for joint filers. The tax deduction is also limited to certain industries where tipping is common. Some of the industries included are bartenders, food servers, musicians, and cleaners.

To take advantage of the new tax deduction, you will need to fill out a new tax form called Schedule 1-A.

Additional Schedule 1-A Deductions

Schedule 1-A is an IRS form used to claim and calculate four tax deductions resulting from a tax and expense bill. These are the change in state and local tax deductions, qualified tip deductions, car loan and senior deductions.

Currently the tax credit is $2,200 per child, but only $1,700 is refundable. This refund is called the Additional Child Tax Credit. To qualify for the Additional Child Tax Credit, you must have an income of at least $2,500 for the tax year.

If you meet all eligibility factors and your annual income is no more than $200,000 ($400,000 if filing jointly), you are eligible to receive the full Child Tax Credit for each qualifying child. Parents and guardians with higher incomes may be eligible to request a partial credit.