Some state residents could enjoy bigger tax cuts next year. See where.

The recent tax bill signed into law by President Trump in July has the potential to lower taxes for millions of Americans, according to a recent analysis from the Tax Foundation. The typical filer could see a tax cut of $3,752 in 2026, with residents of Wyoming expected to receive the biggest average cut of $5,374.

The geographic differences in tax cuts are partly due to variations in the average income of each state. High-income Americans are set to receive larger tax cuts compared to low-income households. States with high property taxes, such as New Jersey and New York, may benefit more from the higher deduction cap for state and local taxes.

Residents of Mississippi and West Virginia are projected to see the smallest tax cuts in 2026, as incomes in these states tend to be lower than the national average. The Tax Foundation analysis indicates that tax refunds are also likely to be larger in early 2026, thanks to provisions such as the new $6,000 deduction for people over 65 and the higher standard deduction.

Seniors and taxpayers across the board may see a boost in their refunds, but it’s essential for individuals to start preparing for these changes now. Workers who are newly eligible for tax breaks on tips and overtime pay should keep track of such income to ensure they benefit from the new law.

The top 1% of earners in the U.S. are set to receive a significant tax break of $75,410 annually in 2026, while households in the bottom 20% of the income distribution may see an average tax break of just $150. However, the actual impact of the law’s tax cuts will depend on an individual’s financial circumstances.

It’s crucial for taxpayers to understand how the new law may affect them and to make any necessary adjustments to increase their refund or lower the amount due. With time still left in the year, individuals can take steps such as adjusting their withholding on a W-4 form to optimize their tax situation.

In conclusion, while the new tax law offers potential benefits for many Americans, the actual impact will vary depending on factors such as income level and geographic location. It’s important for individuals to stay informed and proactive in managing their taxes to make the most of the changes brought about by the legislation.