(News Nation) – Many Americans expect tax refunds to achieve their goals, and there are some things they can do to get back as much money as possible.
A recent credit karma survey found that 37% of taxpayers rely on refunds, rising to 50% of millennials.
According to the IRS, the average tax refund in 2024 was $3,138. This means that when you file a federal tax return, thousands of dollars are at risk.
“It’s your biggest financial transaction every year,” said Mark Staber, Chief Tax Information Officer at Jackson Hewitt Tax Services. “The dollars involved are more expensive than ever.”
Here are four things to keep in mind to maximize your tax refund:
How long does it take to receive a tax refund?
1-Select the appropriate filing status
Your filing status has a big impact on the amount of tax you owe. Determines income tax brackets, the amount of standard deductions, and whether you are eligible for specific credits and deductions.
Typically, filing status is based on whether you were married or unmarried at the end of the calendar year (December 31), but there is more to it.
If you are unmarried: Single vs. Head of household
Those who are not married but are helping to provide children or another qualified family may be able to submit as head of family, a special submission status that will benefit several tax systems.
For 2024 taxes (tax returns filed in 2025), the head of household can request a standard deduction of $21,900 compared to $14,600, which reduces tax liability for those who file as a single person. Taxpayers who charge heads of households are leviing income taxes at a rate that is more favorable than a single filer.
To qualify as head of household, you will need a qualified dependent, child or relative whose child or relative is dependent on you.
You should know the seven main tax conditions
In most cases, people cannot argue that they rely on multiple tax returns. Furthermore, if you submit it jointly, you will not be able to request a spouse.
No, your pet dog won’t count if he depends on you for survival either.
If you are unsure, the IRS has a tool to help you understand your filing status here.
If you are married: Jointly submit separately
Married couples can choose whether to include joint submissions containing a single return or separately with files. This means you and your spouse have your own applications on a variety of income, deductions and credits.
For most married couples, joint submissions are the most economical meaning. This is because joint filers typically receive more tax benefits. They are eligible for a larger standard deduction and are more likely to qualify for certain tax credits, such as children and dependent care credits.
Lisa Greene-Lewis, a tax expert at CPA and TurboTax, summed up these benefits.
However, there may be cases where married couples wish to submit individually.
For example, if you are in the process of separation and do not want to share your tax obligations. Green Lewis said self-employed could be another reason.
According to Turbotax, if you or your spouse have important medical expenses, and if you have important medical expenses, it may also make sense to submit them separately if you have important medical expenses.
Choosing to submit separately may result in disqualification from the tax benefits you may otherwise be charged, so it is important to ensure that the status of your married application is correct.
2-Maintain the most of your tax deductions
By receiving a deduction, you can reduce the entire tax bill. This will allow you to reduce your taxable income.
There are two main options for tax returners: You can choose to charge a standard deduction, a fixed amount set by the IRS, or to itemize deduction items that reduce the tax bill with certain costs in mind.
Most tax returners opt for standard deductions as they are simple and do not require evidence. This is the amount that all taxpayers with income are eligible to deduct before paying their taxes.
Here you can see what the standard deduction is based on your filing status.
Others can refrain from standard deductions in favor of respecting deductions that offer greater tax benefits, especially for homeowners.
4 Tax Benefits for Homeowners in 2025
This is because deductions allow homeowners to amortise costs such as mortgage interest and property taxes to a certain amount. Tax returners can also deduct medical expenses, charitable contributions, and other expenses at itemization.
If the total itemized deduction is greater than the standard deduction, itemization could be a lower tax bill. However, it tends to take longer and you need to closely track your costs.
Also, don’t expect the IRS to tell you which deductions to make.
“The IRS isn’t monitoring it for you,” Steber said. “Like a larger itemized deduction, if you exclude a profit, it stays until you go and fix it or fix it.”
Certain costs are deductible whether they receive standard deductions or itemizations. According to the IRS, they are:
Payment of Alimony Your Auto Use Your Business Use Your Home Business Use You Fine Science Savings Account Penalties for Some Military, Government, Self-employed, and Disabled Teacher Fees for Teacher Fees for Some Military, Government, Self-employed, and Persons with Disabilities
If you are making an item, you can deduct these costs.
Nonperforming loans cancelled debt on home capital loss claims donated to charity from gambling losses for your household Home mortgage interest income, sales, real estate, personal property tax disasters, and adjusted gross income itemized deduction investments of 7.5% or more
3-Use tax credits
It’s easy to confuse tax credits and tax credits, but the two aren’t the same.
Unlike deductions that reduce taxable income, tax credits are dollars that tax applicants can claim to directly reduce their payments.
For example, if you borrow $10,000 and qualify for a $1,000 tax credit, the credit will reduce your tax by $1,000 to $9,000.
In comparison, the $1,000 deduction reduces tax income rather than direct tax invoices, which means that if you’re in a 24% tax bracket, you’ll save $240.
Should you claim a tax credit or deduction for your tax?
Steber called the tax credit the “Holy Grail” of tax benefits and noted that it has nothing to do with the deduction. This means claiming them regardless of whether you get the standard deduction or get the standard deduction.
Greene-Lewis emphasized the importance of keeping records organized, especially if you have children.
“Children are valuable deductions and credits, but they need to have an accurate Social Security number to get them,” she said.
Some common tax credits you can qualify for:
Earned Income Tax Credit (EITC): This is for individuals and families for low to moderate workers. The amount of credit depends on your income, marriage status, and the number of children you have. The maximum credits for the 2024 tax year range from $632 for non-child-free tax filers with three or more qualified children.
Child Tax Credit (CTC): If you have children under the age of 17, you are eligible for this tax credit. In 2024, the credit is worth up to $2,000 per qualifying child. The amount you earn depends on your income and the number of children you have. For more information about eligibility requirements, please see here.
American Opportunity Tax Credit (AOTC): Credit for eligible higher education expenses such as tuition, books, supplies, and more. In 2024, you can charge up to $2,500 per eligible student. To qualify, students must be in the first four years of higher education.
4-I still have time to contribute to the IRA
Contributing to an individual retirement account (IRA) can reduce your tax liability and there is still time for the 2024 tax year.
Tax filers must contribute to the IRA, which may lower the 2024 tax bill until April 15th.
That’s because using a so-called “traditional” IRA allows you to donate pre-tax dollars. This means that you can deduct the amount you put into your taxable income.
For 2024, you can donate up to $7,000 to a traditional IRA ($1,000 catch-up if you’re over 50).
What is a Ross IRA for Kids? How does it work?
As long as the $7,000 limit is not exceeded, the money you enter between now and tax days can be designated as a contribution from the previous year.
Steber said the IRA is one of the only things you can do to affect last year’s taxes after the end of the calendar year.
“It’s an experimental and proven tax benefit,” he says, calling the IRA “golden gem.”
There are several limitations to the IRA deduction. For example, if you or your spouse earn a certain amount or is covered by a workplace retirement plan like 401(k), you may need to reduce or eliminate the IRA deduction completely.
Additionally, contributions to the Ross IRA cannot be deducted.
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