Like it or not, tax time will be here before you know it. Are you getting the biggest refund possible? With so many ins and outs of tax preparation, it’s hard to know for sure, but understanding the best ways to minimize your tax bill can definitely help.
Swipe through for ideas on how you can get the biggest tax refund.
Investigate which tax credits you might be eligible for. The earned income tax credit is available to low and moderate income earners. Homeowners may be eligible for tax credits if they’ve made energy-efficient home improvements, and those who purchased an electric vehicle in 2023 may also be eligible for tax credits.
Parents have access to even more tax credits. People with kids should look into the child tax credit, which can be worth up to $2,000 per qualifying dependent under the age of 17. The child and dependent care credit allows you to claim a portion of your care expenses if you needed care so you could work or look for work.
Deductions reduce your tax liability. There are a number of deductions to look for, including business travel expenses if you are self-employed, charitable donations, student loan interest, medical, mortgage interest, and casualty, disaster, or theft losses.
Look for actions you can take at the end of the year to boost your tax refund. This might include making additional charitable donations or scheduling health exams if you’re eligible for the medical deduction. You can even pay your January mortgage a couple days early to get the mortgage interest deduction.
It’s always smart to save for retirement, and a last-minute contribution to your 401(k) or other employer-sponsored plan, or to a traditional IRA provides the bonus of also helping your tax situation. If you were going to do it, you might as well do it before the end of the year.
Double check your filing status. If you’re single with qualifying dependents or married and filing either separately or jointly, you may want to consider your options. Check to see if you qualify as head of household—you might get a bigger standard deduction than single filers. Married couples may consider filing separately if one spouse makes significantly less than the other.
No one denies that filing taxes is often extraordinarily complicated. The intricacies of the tax code are enough to make your head spin, and they seem to change every year. You might find it best to work with a tax professional who has expertise in tax preparation and will work to get you the biggest tax refund.