The information in this article is up to date for tax year 2023 (returns filed in 2024).
Wondering how to get a bigger tax refund? Taking advantage of money-saving tax credits and deductions is just one way to maximize your refund. Here are some other strategies that will help you get a bigger refund on your taxes or at least help you pay no more than you owe.
Maximize your IRA contributions
A traditional IRA is a great way save for your golden years and potentially save on your taxes. Traditional IRAs are funded with pre-tax dollars. This means you can deduct your contributions from your taxable income, and your earnings grow tax-deferred until you start taking withdrawals in retirement. You have until the tax filing deadline to open or make contributions to an IRA. Aim to make the maximum contribution and don’t forget that if you’re at least 50 years old, you can also make an additional catch-up contribution.
Contribute to a health savings account (HSA)
If you’re currently enrolled in a High Deductible Health Plan (HDHP), consider opening a health savings account (HSA). Since your contributions are made with pre-tax dollars, you won’t pay federal taxes on the money you put in and you’ll save money on your taxes. Your withdrawals for qualified medical expenses are also tax-free. HSA funds don’t expire and can be used to pay for deductibles, copays, coinsurance, and other expenses. For tax year 2023, the HSA contribution deadline is April 15, 2024.
Reconsider your filing status
Your filing status is important because it determines your filing requirements, standard deduction and which credits you’re eligible for. If you got married, divorced, or experienced some other major life change, it’s a good idea to reconsider your filing status. Remember, your marital status on December 31st determines the filing status you’ll use on your return. So, even if you got hitched in December, the IRS considers you married for the entire year and you can file a joint return with your spouse. It’s also worth noting that single parents can benefit more by filing head of household versus single because the standard deduction is higher. Making that simple switch can save you thousands of dollars. When you use ezTaxReturn, we’ll help you choose the best filing status.
Know which receipts are worth keeping
Holding on to the right receipts can help you save money, especially if you plan to itemize. Generally, you want to keep anything related to your income, medical expenses, childcare bills, home, and charitable contributions. For a full list of everything that can save you time and money on your return, check out our tax prep checklist. Store your tax documents in a file folder and label each category, so it’s easy to find when you’re ready to file.
Claim your tax credits
The IRS offers a bunch of tax credits you can claim to reduce the amount of taxes you owe. Some of the most popular ones are:
- Earned Income Tax Credit (EITC) – The EITC was created to help working families with low to moderate incomes. The maximum credit amount varies depending on your family size, but it is potentially worth up to $7,430 for tax year 2023.
- Child Tax Credit – The credit is worth $2,000 per qualifying child under the age of 17.
- Child and Dependent Care Credit – You may qualify for the credit if you paid someone to watch your dependent while you went to work. For tax year 2023, you can claim up to $3,000 of expenses for one qualifying person and $6,000 for two or more qualifying people. The credit amount is a percentage of your care expenses. The percentage is based on your adjusted gross income.
Use ezTaxReturn to ensure you get every tax credit and deduction you rightfully deserve, so you get the biggest possible refund, guaranteed.
Don’t overlook tax deductions
Tax deductions reduce your income before taxes are calculated. Taxpayers have the option of choosing the standard deduction or itemizing. For tax year 2023, the standard deduction is $13,850 for single taxpayers and married couples filing separately, $20,800 for head of household and $27,700 for married couples filing jointly. If your deductible expenses are more than the standard deduction, it makes more sense to itemize. Allowable expenses include:
- State and local taxes
- Charitable contributions
- Gambling losses
- Home mortgage interest
- Medical and dental expenses (above 7.5% of your adjusted gross income)
Do your taxes with ezTaxReturn and we’ll compare your standard deduction versus itemized deductions, so you can choose the one that saves you the most money.
File your taxes fast and ez with 100% accuracy.
The articles and content published on this blog are provided for informational purposes only. The information presented is not intended to be, and should not be taken as, legal, financial, or professional advice. Readers are advised to seek appropriate professional guidance and conduct their own due diligence before making any decisions based on the information provided.
