Trump’s bold new tax promise has families asking one big question

During his December 17, 2025, nationally televised White House address, President Donald Trump is promising what he calls “the largest tax cuts in U.S. history,” saying many American families will save between $11,000 and $20,000 on their taxes in 2026. Also, next spring is projected to be the “largest tax refund season of all time.”​That message is squarely aimed at households feeling squeezed by years of high prices and higher borrowing costs. Trump and his economic team are pitching the tax plan as a direct answer to what they call an “affordability crisis,” arguing that the fastest way to help is to “put more money back in Americans’ pockets."What’s actually in President Trump's new tax cutsBehind the headline number is a package of “working families” tax cuts passed by congressional Republicans and signed into law by Trump, layered on top of extensions to his 2017 tax law. According to a House Ways and Means Committee summary, the new law makes the lower 2017 individual tax rates permanent, increases the standard deduction, and beefs up the Child Tax Credit.​ Shutterstock Republicans also added several highly targeted breaks that Trump regularly highlights include no federal income tax on the following.TipsOvertime pay Social Security benefits for seniorsMore Personal Finance:Estate planning tips every blended family needs to knowDave Ramsey sounds nationwide Medicare alarmAfter Your Death, Who Takes Care of Your Dog?What Medicare Part B price hike means for your 2026 Social SecurityStudent loan forgiveness at risk for manyThe Ways and Means release says the standard deduction rises by $1,500 per family, the Child Tax Credit increases to $2,200 and is indexed to inflation, and the package overall delivers $191 billion in net new tax relief. The administration’s own “good news” fact sheet says taxpayers are expected to receive an extra $91 billion in refunds and keep another $30 billion from reduced withholding in 2026.How much the typical family is projected to save in taxesTrump’s $11,000 to $20,000 figure is an eye-catching number, but it is not a typical estimate for median households. Average tax refunds could rise by around $1,000 per filer next year, driven by the combination of new credits and unchanged withholding tables.Outside estimates are even more cautious. A report summarized by Bloomberg says most filers will see savings “anywhere from less than $100 to a few hundred dollars” more than in past years from the higher standard deduction alone, with larger gains only for those able to stack multiple new breaks.

The Penn Wharton Budget Model analysis referenced in that report finds the largest tax savings are likely to accrue to households in the top income quintile and to those who can fully use new deductions for items such as tips or expanded state and local tax write-offs.Who might actually see five‑figure tax cutsSo who, if anyone, gets close to Trump’s promised $11,000 to $20,000 in yearly tax savings? Analysts note that such large benefits are generally only plausible for higher‑income households that:Have sizable tip or overtime income that now goes untaxed at the federal levelClaim multiple children and fully benefit from the enhanced Child Tax CreditPreviously hit the cap on state and local tax (SALT) deductions and can now write off moreThe New York Times reports that only a relatively small share of households benefit from the no‑tax rule on tips, and even the richer standard deduction for seniors reaches only a fraction of older filers. That means Trump’s headline figure is best understood as a “maximal case” for select families stacking several targeted breaks, not a baseline expectation for the median taxpayer.What the tax changes mean for your household budgetFor your own wallet, the key is to focus on actual numbers tied to your income, family size, and how you earn. A tipped worker or someone who logs heavy overtime hours could see meaningful additional savings because those categories are now exempt from federal income tax, while salaried workers without those features may see only modest changes in withholding and their final refund.If you have children, the richer Child Tax Credit and a higher standard deduction can reduce your tax bill directly, sometimes by hundreds of dollars, but usually not by tens of thousands. And while a larger refund can feel like a windfall, analysts point out that it’s essentially money you overpaid during the year. The smart move is to treat it as a tool to pay down high‑interest debt, rebuild your emergency fund, or kick‑start investing, instead of just spending it.How experts are reacting to the promiseEconomists and tax analysts are divided on both the size and the distribution of the new tax relief. Supporters on Capitol Hill argue that bigger refunds and lower taxes on work will help families “better afford Democrats’ cost‑of‑living crisis,” citing surveys that show most people use refunds to cover rent, groceries, and credit‑card bills. Critics point out that the largest percentage gains come at the upper end and for narrower groups favored by the new breaks, while many middle‑income households see only marginal relief relative to still‑elevated prices. Some policy analysts also warn that using tax cuts and potential “tariff rebates” simultaneously could add to deficits and complicate efforts to control inflation if spending doesn’t fall elsewhere in the budget.How to plan for 2026 tax changesAs a taxpayer, you cannot control the political spin, but you can control how ready you are when the new rules hit your paycheck and your 2026 refund. The IRS has started issuing guidance on new savings vehicles tied to the working families tax cuts — such as so‑called “Trump Accounts,” which will receive a one‑time $1,000 federal contribution for eligible children born between 2025 and 2028. Those accounts may matter at the margins, but financial advisors cited by the American Enterprise Institute argue that more familiar tools such as 529 plans and Roth accounts will still be better long‑term savings vehicles for most families.Between now and the 2026 filing season, you’ll want to:Check how much of your income comes from tips, overtime, or Social Security, since those categories are treated more favorably and can materially change your tax picture.Revisit your withholding once the IRS updates tables so you’re not shocked by either a smaller refund or an unexpected balance due.Decide in advance how you’ll use any extra refund (whether to knock down credit‑card balances, build a three‑month cash cushion, or automate monthly investing), so that promised “tax savings” actually move you closer to financial security instead of just disappearing into everyday spending.President Trump’s $11,000‑to‑$20,000 promise makes for a powerful soundbite, but your real savings will come down to your numbers, not the headline. If you treat any tax break as an opportunity to get ahead on your debts and long‑term goals, even a few hundred extra dollars back at tax time can matter much more than any televised pledge.Related: Trump's tariff changes may be good for watch collectors