The year 2025 witnessed several major tax-related changes, most notably the Trump administration’s decision to discontinue the free IRS Direct File electronic system for filing tax returns. This move has prompted experts to urge taxpayers to begin preparing now for the upcoming year to avoid costly mistakes.
Dan Snyder, Director of Financial Planning at the American Institute of Certified Public Accountants (AICPA), said in a press statement that taking action before the end of this year will greatly benefit Americans’ financial health in 2026. He added: “We’ve seen many changes to taxes and financial planning this year, and now is the right time to make adjustments that will impact your tax bill before April 15, 2026.”
Earlier this month, the U.S. administration confirmed that the IRS Direct File system will not be offered next year.
Debate Grows Over IRS Direct File’s Future
While users praised the program for making tax filing easier, faster, and more efficient, it faced criticism from Republican lawmakers, who accused it of wasting taxpayer money since free filing programs already exist. It was also criticized by commercial tax-preparation companies that earned billions of dollars by charging Americans fees to use their programs.
Treasury Secretary Scott Bessent, who also serves as the current IRS Commissioner, stated that there are “better alternatives to this program.” He added: “The program was not used much. We believe the private sector can do a better job.”
Meanwhile, the Taxpayer Rights Center filed a request for an IRS evaluation of the program under the Freedom of Information Act. The report showed that 296,531 taxpayers filed accepted returns through the program for the 2025 tax season, compared to 140,803 returns in 2024.
New Deduction Rules and Charitable Limits Under the Big Beautiful Bill
According to the report, as part of the “Big Beautiful Bill,” the changes do not only include an increase in the standard deduction—eligible seniors will receive an additional $6,000 bonus deduction. According to the Tax Foundation, nearly 86% of tax filers are expected to benefit from the standard deduction next year.
The bill also sets new limits for charitable donations. Beginning in 2026, taxpayers may claim an additional $1,000 deduction for single filers or $2,000 for joint filers. Even those who previously donated without itemizing can deduct these amounts as cash gifts to qualifying charities.
For high-income taxpayers or those planning to itemize deductions, new limits will also apply. A new “minimum” requirement will make charitable contributions exceeding 0.5% of adjusted gross income deductible. As a result, taxpayers may want to submit their donations before December 31 to avoid the new rule changes.