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There’s a fresh wave of tax refunds coming for Americans in 2026, and that’s according to the chief global strategist at JPMorgan Asset Management, David Kelly.

In a note published on LinkedIn, Kelly explained that many of the tax cuts announced as part of President Donald Trump’s One Big Beautiful Bill Act (OBBBA) are retroactively effective from Jan. 1, 2025. However, the IRS has confirmed that it would not be adjusting tax withholding rates in 2025 (1).

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In other words, many taxpayers will pay more upfront but get a bigger refund in 2026.

Kelly estimates that the average refund could be roughly $3,743 for 2026 — that’s an increase of $557 from the average refund reported by the IRS for the previous tax year (2). However, it’s important to note that anyone who qualifies for one or more of the new tax deductions under the OBBBA has to use the new Schedule 1-A form to claim them.

To reach this new refund amount, you’ll need to be able to take advantage of as many of the new deductions as possible — including exemptions on overtime pay and tips.

While an extra $557 in tax refunds sounds like good news, Kelly warns that this wave of repayments is not spread equally.

It could also have unintended consequences for the broader economy.

The OBBBA contains hundreds of provisions, and only some of those are tax cuts. Kelly’s warning applies to cuts focused on specific groups.

For instance, the OBBBA provides a $6,000 deduction for taxpayers age 65 years and over, but that tax deduction phases out when income exceeds $175,000 for a single filer or $250,000 for joint filers (3).

Employees and self-employed individuals may deduct up to $25,000 of qualified tips from their income, and up to $12,500 (or $25,000 if filing jointly) from their overtime income. But these deductions phase out for taxpayers with adjusted gross income over $150,000 (or $300,000 for joint filers).

The OBBBA also allows a car loan interest deduction of up to $10,000 if a new vehicle was purchased in 2025 and is used for personal reasons over 50% of the time. This deduction, too, phases out for taxpayers with a gross income of $149,000 (or $249,000 for joint filers).

Then there is the Child Tax Credit, which has been increased from $2,000 to $2,200 and will be adjusted for inflation going forward (4).

“All of these tax breaks, with the exception of the child tax credit, are in the form of deductions,” Kelly wrote on LinkedIn. “This means that the higher your marginal tax rate, the greater the value of the deduction.”

That is, up to the point at which your income is so high that the tax cut is tapered out entirely.

Meanwhile, although the Trump administration has been cutting taxes on Americans’ incomes, it has also been raising them on imports.

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The Trump administration’s decision to install tariffs impacts all consumers.

And it is hiking them despite the Supreme Court ruling that Trump’s use of the 1977 International Emergency Economic Powers Act is illegal. The administration sidestepped the decision by turning to Section 122 of the Trade Act of 1974 to impose a 15% tariff (5).

The good news is that Trump’s original run of tariffs generated more than $130 billion in revenue, as of mid-December 2025 (6). But estimates from the Penn Wharton Budget Model suggest the government could ultimately owe up to $175 billion in refunds (7).

However, despite lawsuits from more than 1,000 companies seeking repayment (8), U.S. Customs and Border Protection told a U.S. Court of International Trade judge it currently can’t begin issuing the roughly $166 billion in refunds tied to tariffs imposed by Trump last year (9).

“People say the retailer is going to eat it — no they’re not, they just wrote the check,” Kelly explained in an interview with Bloomberg Television (10). “Of course, it looks like they’re eating it [but if] Walmart writes a check eventually they’re going to pass it on.”

That means American consumers will also suffer.

In fact, tariffs in effect as of September 2025 could cost American households up to $2,400 on average, according to The Budget Lab at Yale (11).

More importantly, unlike the OBBBA tax cuts, which disproportionately impact higher income households, these import taxes have a greater impact on poor households because a larger share of their income is spent on buying essentials, according to the Tax Foundation (12).

The combination of tariffs and tax refunds could create economic conditions that are similar to the COVID-19 pandemic, according to Kelly.

“The big kicker here, that people are not talking about, is this huge rush of income tax refunds that’s going to kick in at the start of next year is going to be like an extra stimulus check,” he said (10). “And we’ve seen what happens … you give an American consumer a stimulus check, they will spend it … You are going to get a second round of inflation.”

The ongoing impact of tariffs, coupled with supply shocks from the war in Iran, could push inflation in America to 4.2% by the end of 2026, according to the Organisation for Economic Co-operation and Development (13).

Although there’s no crystal ball to predict inflation or tariff rates, you can work with a financial planner to get a fair estimate of your tax refund well before tax season.

That’s where Advisor.com can come in, which connects you with a certified financial expert near you for free.

Advisor.com does the heavy lifting for you, vetting advisors based on track record, client ratios and regulatory background. Plus, their network is made up of fiduciaries, who are legally required to act in your best interests.

All you have to do is enter a few details about your finances and yourself, like your ZIP code, and Advisor.com’s AI-powered matching tool will connect you with a qualified expert suited for your needs based on your unique financial goals and preferences.

Finding the right advisor isn’t always easy — there’s no one-size-fits-all solution. That’s why Advisor.com lets you set up a free initial consultation with no obligation to hire to see if they’re the right fit for you.

Once you’ve got the right financial advisor in your corner, the next step is getting a clear picture of where your money’s actually going — whether during tax time or the rest of the year.

Beyond understanding your future tax situation and then working within a tight budget, there are other ways to protect your earnings against inflation.

Investing can offer better protection than a checking or savings account. That said, stock market performance can be volatile.

This is where investments like real estate and gold can become attractive alternatives.

Even though gold prices have pulled back a bit recently, the precious yellow metal remains a popular safe haven during periods of economic uncertainty.

And its performance over the past year shows it: The price of gold has surged more than 57% in value over the past 12 months, far outpacing the roughly 12.8% gain in the S&P 500 Index (14).

So, if you’re looking for a way to invest directly in physical precious metals, like gold, rather than stocks and bonds, you could consider a gold IRA through Priority Gold.

Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold, making it an attractive option for those looking to hedge their retirement funds against economic uncertainties.

If you’d like to convert an existing IRA into a gold IRA, Priority Gold also offers 100% free rollover, as well as free shipping and free storage for up to five years. Qualifying purchases can also receive up to $10,000 in free silver.

To learn more about how Priority Gold can help you reduce inflation’s impact on your nest egg, you can download their free 2026 gold investor bundle.

And when it comes to investing in real estate, you don’t have to buy property outright to tap into the market.

You can now tap into this market by investing in shares of vacation homes or rental properties through Arrived.

Backed by world-class investors like Jeff Bezos, this crowdfunding platform lets you buy shares of SEC-qualified investments in residential properties and vacation rentals across prime locations in the U.S.

Plus, any rental income generated is distributed to you monthly, and any property appreciation is paid out as capital gains at the end of the investment hold period. This way, you can sit back and collect passive income while Arrived does all the legwork.

What’s more, for a limited time, when you open an account and add $1,000 or more, Arrived will credit your account with a 1% match.

If diversifying into multifamily and industrial rentals appeals to you, you could consider investing with Lightstone DIRECT, a new investing platform from the Lightstone Group, one of the largest private real estate companies in the country with over 25,000 multifamily units in its portfolio.

Since they eliminate intermediaries — brokers and crowdfunding middlemen — accredited investors with a minimum investment of $100,000 can gain direct access to institutional-quality multifamily opportunities. This streamlined model can help reduce fees while enhancing transparency and control.

And with Lightstone DIRECT, you invest in single-asset multifamily deals alongside Lightstone — a true partner — as Lightstone puts at least 20% of its own capital into every offering. All of Lightstone’s investment opportunities undergo a rigorous, multi-stage review before being approved by Lightstone’s Principals, including Founder David Lichtenstein.

How it works is simple: Just sign up with your email, and you can schedule a call with a capital formation expert to assess your investment opportunities. From here, all you have to do is verify your details to begin investing.

Founded in 1986, Lightstone has a proven track record of delivering strong risk-adjusted returns across market cycles with a 27.6% historical net IRR and 2.54x historical net equity multiple on realized investments since 2004. All told, Lightstone has $12 billion in assets under management — including in industrial and commercial real estate.

As such, even if multifamily rentals don’t appeal to you, Lightstone could still serve you well as an investment vehicle for other real estate verticals.

Get started today with Lightstone DIRECT and invest alongside experienced professionals with skin in the game.

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We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

LinkedIn (1); IRS (2), (3); Tax Policy Center (4); Yale Journal on Regulation (5); NBC News (6); Penn Wharton Budget Model (7); FOX 13 Tampa Bay (8); CNBC (9); @markets (10); The Budget Lab at Yale (11); Tax Foundation (12); Organisation for Economic Co-operation and Development (13); APMEX (14)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.