Transcription
President Trump, the IRS CEO, and the Treasury Secretary are now all saying that we will see the biggest tax refund in history this year. But how true is it? So today, I want to break this down. As a practicing accountant and tax strategist at keepmost.com, I don't want to just give you the headline here. I want to teach you exactly why this is happening and then give you a simple mental model so you can decide what to do with this opportunity and let's crowdsource opinions here. Let's leave a comment and let me know if you believe this or not. But as always, we have to look at the data first.
We have Frank Bizinano, the CEO of the IRS. He went on Fox News and he made a prediction. He said 2026 is going to see the biggest tax refund ever. "There are going to be substantial refunds to working American households in the first quarter. We're going to see very substantial 100 to 150 billion of refunds in the first quarter go directly to Americans."
And he isn't the only one. President Donald Trump came out in his end of the year address and predicted the largest tax refund season of all time. Under these cuts, many families will be saving between $11,000 and $20,000 a year and next spring is projected to be the largest tax refund season of all time.
Then you have Scott Bessant, the Treasury Secretary. He goes on the All-In podcast. Great show, by the way. and he says, "I can see that we are gonna have a gigantic refund year."
So, working Americans, I I also had the honor of being the IRS commissioner and I can see that we're going to have a gigantic refund year in the first quarter because no one changed their working Americans did not change their withholding. So I I think households could see at the beginning of the year and they will get an automatic increase the in real wages. So I think that's going to be a very uh I I think that's going to be a very powerful combo of corporate and individuals.
Now you might be thinking to yourself, Karan, how big is this? Well, they are estimating that the average household could see a refund check of anywhere from $1,000 to $2,000 more than usual. Now, I want to take a quick sidebar because you are going to see some even bigger numbers thrown around in the news, and I don't want you to get confused here. You might hear about families saving $11,000 to $20,000 or seniors saving $6,000. Well, White House press secretary Carolyn Levi even pointed to data from Piper Sandler showing refunds growing by a staggering 91 billion. But just remember those massive numbers are the total savings created by the new bill. Things like the larger child tax credit, the higher standard deduction, and the elimination of taxes on tips, overtime, and social security. And these are only a handful of the 90 tax strategies we have inside keepost.com that helps everyday Americans and business owners save on taxes. Nonetheless, the reason this matters for your refund is that for most of you, those savings weren't applied to your paychecks last year. The government simply kept collecting taxes on your tips and overtime, even though the law said that they shouldn't. So those savings are what is fueling the refund.
But here is the most important question. Why? Why is the government writing these massive checks? Is it a gift? No, it is actually a refund of your own money because of one specific word, withholding. You see, President Trump signed the One Big Beautiful Bill Act in July of 2025. Now, that bill lowered taxes, but here's the thing. The tax cuts were retroactive, and that simply means that they counted for the whole year starting back to January 1st. But did your employer change your paycheck in January? No. Did they change it in March? No. Most employers didn't even change their payroll systems after the bill passed in July. So, what does that mean? It means that you have unfortunately been overpaying. You, the taxpayer, have been paying taxes at the old higher rate even though you legally owe taxes at the new lower rate. Basically, you have been giving the government an interest-free loan all year long.
Let's go back. The one big beautiful bill was passed on July 4th, but for working Americans, it was retroactive to the beginning of the year. Most taxpayers did not change their withholding. So, as a result, we're going to see very substantial 100 to 150 billion of refunds in the first quarter go directly to Americans pockets. So, the sooner they file, the sooner they'll get them. Our estimate is it could be a $1,000-$2,000 per household depending on on the number of workers.
You see, here's the thing that a lot of people miss. When Congress passes a new tax law, there is always, and I mean always, a lag time. The IRS has to update their systems and payroll companies like ADP and paychecks have to reprogram their software. Your HR department has to update their withholding tables. And all of that takes time. Sometimes it takes months. And in this case, many employers just said, "We'll wait until next year to update everything." basically kicking the can down the road. So, every two weeks when you got your paycheck, the federal government was taking out more money than they were legally allowed to take. And how much? Well, we have to look at the numbers because the numbers don't lie. The Tax Foundation, a great group, nonpartisan, they love data. We love data. And they put out a report on December 17th. They estimated that this bill reduced individual taxes by $140 billion for 2025. So that is $144 billion that was supposed to be in your pockets, but it got stuck in Washington because the withholding tables weren't updated. And now that money is flowing back to you.
Now I do want to shift gears here. I want to put on my teacher hat just for a second. I want to give you a mental model for how to handle this situation. You see, in the financial world, people love to argue. Experts will tell you you shouldn't have given the government an interest-free loan. That's simply bad math. And yes, they are correct. Mathematically, it is better to have that money during the year. But we are human beings. We are not calc. So with that, there is something called forced savings. So here's your strategy. You are going to have this check arrive sometime between February and April 2026. And you have three buckets you can put this money into. I'm not going to tell you which one to pick. I want you to look at your own life and decide for yourself. Now, when you get this money, ask yourself, what is the best move for my situation? If you need fun, choose fun. If you need safety, choose defense. And if you want growth, choose offense.
The IRS says the deadline to file is April 15th, 2026. But they are telling you to get your paperwork ready right now. And why? Well, because the sooner you file, the sooner you get your money back. So, while the government is predicting the biggest refund ever, make sure you turn it into your biggest opportunity ever. And there you have it. That's the breakdown. I hope this gave you some clarity on what's coming in 2026. If you found any value at all in this video, give it a like and share with somebody that is important to you. My name is Kuran and as always, I'll see you in the next video. Take care.