Two main reasons: 1) Congress made a number of new and expanded tax breaks effective for tax year 2025; and 2) most people did not adjust the tax withholding on their paychecks last year to account for the changes in their tax breaks. Your tax liability for 2025 went down because of changes to the tax law, but your tax payments didn’t, he explained. A larger standard deduction: The standard deduction is taken by the vast majority of filers. You may be seeing a little more in your paychecks already, because the IRS income tax withholding tables for 2026 have been adjusted, according to the Treasury. And those tables should account for all the tax breaks in effect for this year.

Source: CNN January 27, 2026 00:46 UTC