Tax refunds feel like “found money,” but they’re really you getting your own cash back after giving the IRS an interest-free loan all year, as basic IRS guidance makes clear.

Treasury Secretary Scott Bessent’s comment that many Americans may see the largest tax refunds of their lives sounds like a win, but also a red flag for how your 2025 taxes were handled, according to the prepared remarks the U.S. Department of the Treasury posted online.

From where I sit, any time Washington promises “largest” refunds and “bigger” paychecks in the same breath, you have to ask whether you are actually getting richer or just changing when you see the money, as tax planners often warn.

What Bessent actually said about tax refunds

Secretary Bessent framed the whole story as a Biden-versus-Trump contrast and then pivoted directly to your wallet, according to the Treasury’s transcript of his remarks in Minnesota.

The Working Families Tax Cut Act “prevented a $4.5 trillion tax hike, allowing the average American to keep up to $7,200 more in annual real wages and the average family of four to keep up to $10,900 more in take-home pay,” Bessent said in his speech.

He added that the bill “delivers for seniors by giving 88% of retired Americans a new deduction that eliminates tax on Social Security benefits” and codifies “no tax on tips and no tax on overtime pay,” before promising that “millions of Minnesotans and Americans may see the largest tax refunds of their lives” once tax season opens Jan. 26.

How the 2026 tax filing season is different

The IRS has now backed up one key detail from Bessent’s speech by confirming the calendar. The 2026 filing season for 2025 returns opens Monday, Jan. 26, and several new tax law provisions of the One Big Beautiful Bill Act take effect this year, the agency said in a January news release.

Experts predict that many taxpayers might experience larger tax refunds in 2026 due to retroactive adjustments made through President Donald Trump’s multitrillion-dollar tax legislation, according to CNBC.

The IRS did not revise withholding tables for employers right away after the law passed in 2025, which means many workers had too much taken out each pay period under the old rules, tax preparers told CNBC.

U.S. Treasury Secretary Scott Bessent said Americans may soon see the largest tax refunds of their lives.

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The agency expects about 164 million individual returns this season and knows that millions of Americans will jump on the Jan. 26 opening date because it means they will receive tax refunds sooner, CPA Practice Advisor reported.

For the average American, this year’s refund is expected to be larger than last year’s, by roughly $300 to $1,000 in many estimates, according to the same CPA report summarizing industry forecasts.

Several moving parts inside Trump’s package help explain why that can happen. The Working Families Tax Cut Act folds earlier rate cuts into a new package that emphasizes bigger standard deductions, an enhanced child tax credit, and permanent lower marginal rates, the House Ways and Means Committee said in its summary.

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“Trump Accounts” give eligible children born starting in 2025 a $1,000 Treasury-funded investment account that converts to an IRA-type vehicle later in life, with early IRS guidance saying it is funded automatically when parents elect it on their tax return, according to a December IRS notice and a write-up from advisory firm CRI.

The package also “makes permanent the lower tax rates from the 2017 Trump tax cuts, boosts the Child Tax Credit to $2,200, and locks in the “no tax on tips” and “no tax on overtime” provisions now featured in Trump messaging.

Three big questions Bessent’s promise raises for your refund

Bessent’s promise of “largest tax refunds” sounds simple at first hearing, but once you dig in, it raises at least three big questions for your 2025 return, as financial planners and tax writers such as The Tax Adviser have pointed out.

Are you just getting your own money back?

Withholding tables that lag the law are a big part of the story. Withholding tables were not updated immediately after Trump’s bill passed, so many workers had more tax withheld than they owed under the new rules, according to CNBC’s analysis of the rollout.

That sets up the pattern Bessent described, where you pay too much all year, then get a “windfall” refund in the spring.

From a financial-planning standpoint, that kind of refund can feel great, but is still a sign that your paycheck withholding was not aligned with your actual tax liability, tax advisors told the Journal of Accountancy.

If you live paycheck to paycheck or you’re trying to pay down high-interest debt, you are often better off with $150 a month extra in your paycheck than with a $1,800 tax refund next spring, many planners argue.

Will everyone really see a bigger refund?

A lot of the headline benefits Bessent touted are targeted rather than universal. The law boosts the Child Tax Credit to $2,200, increases it by $1,500 per family, makes permanent the doubled standard deduction, and codifies the no-tax rules for tips and overtime, the Ways and Means Committee said in its fact sheet.

Higher-income taxpayers who itemize deductions may see less impact from larger standard deductions than lower- or middle-income filers, tax experts told CPA Practice Advisor.

Related: Secretary Bessent drops U.S. auto loan deduction bombshell

Households without children at home will not benefit from the child credit changes, and those who rely on interest, dividends, or self-employment income may get less from payroll-focused provisions like no tax on tips, CRI’s Trump Account explainer suggested.

The IRS stressed that the amount of your refund or any taxes owed will depend on your 2025 withholdings and how Trump’s new provisions affect your specific circumstances, even while confirming that average refunds rose slightly last year and are expected to increase again, according to an AP News overview of the season.

How do Trump Accounts and Social Security changes affect you now?

Trump Accounts are one of the flashiest pieces of the Working Families Tax Cut Act, but they are not a reason to expect a bigger 2025 refund. The federal government makes a one-time $1,000 contribution to an eligible child’s Trump Account, not to a parent’s refund, according to CRI’s breakdown of the program.

Bessent also said the bill “delivers for seniors by giving 88% of retired Americans a new deduction that eliminates tax on Social Security benefits,” a line that suggests a major shift for retirees.

The actual benefit depends heavily on how much other income filers have from pensions, part-time work, and investments, because Social Security taxation has always hinged on combined income, as Social Security and tax guides remind retirees.

If you are in or near retirement, the Social Security promise is a strong reason to run the numbers with a tax pro rather than a guarantee that your refund will automatically spike, according to advisers quoted in the Journal of Accountancy.

What you should do before Jan. 26

You cannot control tax law, but you can control how exposed you are to surprises when refunds start hitting bank accounts. Before the IRS officially opens the gate on Jan. 26, it is worth doing a quick personal checkup, tax professionals say.

Use this simple checklist to prepare to file 2025 taxes:

  • Pull your last pay stub of 2025 and compare your total federal withholding to your 2024 tax bill so you can see whether you are on track for a much bigger refund or a smaller one, as consumer tax writers at Yahoo Finance recommend.
  • If your income, number of dependents, or filing status changed in 2025, use the IRS withholding estimator or talk to a tax pro before you lock in your 2026 Form W-4.
  • If you get tips or regular overtime, watch how your employer handles those in 2026 and push for updated payroll settings so you are not over-withholding under the new no-tax rules, as payroll experts told CPA Practice Advisor.

A larger refund can be good news, but only if you understand why you are getting it and how to keep more of that money in your pocket all year, not just when the government finally sends some of it back.

Related: Secretary Bessent has good news for working Americans in 2026