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The Truth About 2026 Tax Refunds and Withholding
Why Your 2026 Tax Refund Is Smaller: 5 OB3 Law Changes Explained
CPA Stephen Lee explains why 2026 tax refunds may be smaller even if you didn’t pay more in taxes, citing five updates tied to the “One Big Beautiful Bill (OB3)” passed in mid-2025. He covers updated IRS withholding tables that spread tax cuts across paychecks, a new 0.5% AGI floor on charitable deductions for itemizers, the expiration or reduction of residential green energy credits after December 31, 2025, faster phaseouts of new deductions and limits (including the $6,000 senior bonus deduction, SALT cap changes, and caps on no-tax tips and overtime), and confusion around higher 1099-K and 1099-NEC thresholds that can lead gig workers to underreport income and owe self-employment tax. He emphasizes that smaller refunds often reflect more accurate withholding and recommends checking 2026 withholding on the IRS website or adjusting a W-4 if desired.
00:00 Why Your 2026 Refund Is Smaller (It’s Not Higher Taxes)
00:44 Reason #1: The Withholding Trap—OB3 Tables Finally Updated
01:41 Reason #2: New Charitable Deduction Floor (0.5% AGI)
02:27 Reason #3: The Green Credit Cliff—Energy & EV Credits Sunset
03:09 Reason #4: Phase-Out Speed Traps (Senior Bonus, SALT, Tips/Overtime)
04:04 Reason #5: 1099-K Confusion—No Form Doesn’t Mean No Tax
04:36 Bottom Line + What to Do Next (Check Withholding, Adjust W-4)
Subscribe for more tips and strategies tailored for business owners and high earning professionals.
On this channel, Stephen Lee shares proven strategies to help high earners, business owners, and professionals keep more of what they make, minimize taxes, and build lasting wealth.
Whether you’re optimizing your S-Corp, investing smarter, or managing 1099 income, this channel gives you the tools to make confident money moves — backed by real client experience.
Subscribe for smart, actionable advice — and take control of your financial future.
The information provided on this channel is for general information and entertainment purposes only. It is not intended to serve as legal, financial, or tax advice. You should not act or refrain from acting on the basis of any content included on this channel without seeking appropriate legal, tax, or other professional advice specific to your individual circumstances. The use or reliance on any information contained on this channel is solely at your own risk.
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By Stephen Lee, CPA, CPWA®Why Your 2026 Tax Refund Is Smaller: 5 OB3 Law Changes Explained
CPA Stephen Lee explains why 2026 tax refunds may be smaller even if you didn’t pay more in taxes, citing five updates tied to the “One Big Beautiful Bill (OB3)” passed in mid-2025. He covers updated IRS withholding tables that spread tax cuts across paychecks, a new 0.5% AGI floor on charitable deductions for itemizers, the expiration or reduction of residential green energy credits after December 31, 2025, faster phaseouts of new deductions and limits (including the $6,000 senior bonus deduction, SALT cap changes, and caps on no-tax tips and overtime), and confusion around higher 1099-K and 1099-NEC thresholds that can lead gig workers to underreport income and owe self-employment tax. He emphasizes that smaller refunds often reflect more accurate withholding and recommends checking 2026 withholding on the IRS website or adjusting a W-4 if desired.
00:00 Why Your 2026 Refund Is Smaller (It’s Not Higher Taxes)
00:44 Reason #1: The Withholding Trap—OB3 Tables Finally Updated
01:41 Reason #2: New Charitable Deduction Floor (0.5% AGI)
02:27 Reason #3: The Green Credit Cliff—Energy & EV Credits Sunset
03:09 Reason #4: Phase-Out Speed Traps (Senior Bonus, SALT, Tips/Overtime)
04:04 Reason #5: 1099-K Confusion—No Form Doesn’t Mean No Tax
04:36 Bottom Line + What to Do Next (Check Withholding, Adjust W-4)
Subscribe for more tips and strategies tailored for business owners and high earning professionals.
On this channel, Stephen Lee shares proven strategies to help high earners, business owners, and professionals keep more of what they make, minimize taxes, and build lasting wealth.
Whether you’re optimizing your S-Corp, investing smarter, or managing 1099 income, this channel gives you the tools to make confident money moves — backed by real client experience.
Subscribe for smart, actionable advice — and take control of your financial future.
The information provided on this channel is for general information and entertainment purposes only. It is not intended to serve as legal, financial, or tax advice. You should not act or refrain from acting on the basis of any content included on this channel without seeking appropriate legal, tax, or other professional advice specific to your individual circumstances. The use or reliance on any information contained on this channel is solely at your own risk.