How the “Working Families Tax Cut” Aims to Simplify Filing

House Republicans are showing what tax reform looks like when it is built around working families and a simpler tax code. The Working Families Tax Cuts of 2025, enacted as part of the “One Big Beautiful Bill Act,” are intended to streamline filing, lower taxes, and deliver meaningful relief to households across the country.

For 91 percent of taxpayers, the policy centers on a simpler filing structure. The expanded standard deduction means families pay no federal income tax on the first $31,500 they earn, and individuals pay no tax on the first $15,750. By allowing most households to avoid itemizing, the law is designed to reduce unnecessary complexity during tax season.

Locking in the larger standard deduction also saves time and money. Americans avoid an estimated 210 million hours of tax paperwork each year and roughly $13 billion annually in compliance costs. Those savings reflect a tax code structured to be easier to navigate for working families.

The tax cuts are also expected to increase refunds this filing season. Because the reforms are retroactive to 2025, the average tax refund is projected to rise by about $1,000. In

total, approximately $91 billion in additional refunds are expected to be returned to taxpayers this spring.

The legislation also clarified the proper scope of federal tax administration by suspending the government-run Direct File program. Under the Working Families Tax Cuts, tax filing remains centered on voluntary, private-sector options rather than a single government-operated system.

Recent reporting on the challenges of the current filing season highlights why filing simplicity matters. When fewer taxpayers are required to navigate complicated rules, filing becomes more predictable for everyone involved.

The Working Families Tax Cuts also restored common-sense thresholds for 1099-K reporting. The law reset the standard to $20,000 and 200 transactions, replacing the prior $600, single-transaction threshold. That change ensures routine digital payments are treated appropriately and reduces confusion for taxpayers using modern payment platforms like Venmo.

CFE Takeaway

A tax code that emphasizes simplicity can reduce compliance burdens and make filing more manageable for working families. The “Working Families Tax Cut” reflects an effort to move in that direction by lowering taxes and narrowing the scope of complex filing requirements.