Start gathering your documents because tax time is here. Filing taxes may not top your list of exciting things, but it can be a far less grueling task if you’re getting money back. Most tax filers receive a tax refund, which may give you something to look forward to heading into tax season. In this article, we’ll show you how you can get the maximum tax refund in 2024.
The IRS will always tell you whether you owe them more money, but don’t expect them to let you know if you missed taking a tax credit or deduction on your return. It’s up to you to stay informed about the top tax deductions and credits that can help maximize your refund.
Here are some tips you should know about how to get the maximum tax refund.
In the meantime, learn how you can become eligible to file your taxes in the MoneyLion app for free*.
1. Review common tax deductions and credits
If you have a child or dependent, you may be eligible for a tax break by claiming the Child Tax Credit (CTC). You can take a credit of up to $2,000 per eligible dependent under the CTC.
You may also be eligible for a tax credit if you pay qualified care expenses, such as daycare. Under the Child and Dependent Care Credit (CDCC), you could get a credit worth up to $3,000 for one child or up to $6,000 for multiple children.
Not all tax credits are refundable, meaning they may lower your taxes but won’t carry over and increase your refund. Reducing the amount you’ll pay in taxes can positively impact your refund in the long run.
You may also be eligible for tax deductions if you paid for college or post-secondary school expenses with the American opportunity tax credit (AOTC) or lifetime learning credit (LLC). If you’re a teacher, you may even be able to deduct classroom supplies you purchased for your students. If you adopted a child this year, you may be able to claim the adoption credit to boost your refund.
2. Claim your business expenses
Although your taxes get a bit more complicated when you have self-employment income, there are some benefits. While you may need to pay taxes on your earnings from side hustles, freelance gigs, and other untaxed business income if you didn’t pay those taxes throughout the year, you can offset some of this income and make sure your tax bill goes down — which could cause your refund to grow — by claiming relevant business expenses and deductions.
Business travel, business meals, your home office, equipment expenses, and ongoing education to improve your skills are all common business expenses you can claim that may reduce the amount you’ll pay in taxes.
3. Make sure you use the right filing status
If you’re married, it’s generally (but not always) more lucrative to file a joint tax return, although it can be more involved. That’s because married, joint filers often have access to bigger tax breaks, which can help boost your refund. Filing separately can prevent one spouse from claiming certain tax credits and breaks, which could result in paying more taxes.
If one spouse makes considerably less than the other, it may be more advantageous to file separately.
4. Contribute to your IRA or HSA
You can contribute to your individual retirement account (IRA) or health savings account (HSA) for the previous year (2023) until the filing deadline. If you want to maximize your tax benefits — and possibly help boost your refund — contributing at the beginning of the year could help you reduce your taxable income and may allow you to qualify for the saver’s credit if you meet the income thresholds.
The bottom line
Be sure to claim all eligible tax deductions or credits, claim your business expenses if you worked a side hustle, and use the right filing status for your financial situation. To boost your refund even more, you can also contribute to your 2023 HSA or IRA. Don’t leave money on the table this tax season. If you need additional help, seek out a tax professional or go to IRS.gov for additional information on contributions, deductions and filing status.
FAQs
How do I get the most money from my taxes?
You can help get the most money from your taxes when you pick the right filing status, take advantage of any tax deductions or credits you are eligible for, and make the maximum contributions to your traditional IRA or HSA.
How do I maximize deductions?
How do I get a bigger tax refund? Maximizing your deductions could keep more money in your pocket. You can check the most common tax deductions to ensure you have received all you qualify for. The choice between taking the standard deduction and itemizing your deductions could help maximize your deductions.
The standard deduction is a flat amount you subtract from your taxable income. If you pay a mortgage or state tax, you could maximize deductions when you itemize. If the amounts you pay for such eligible expenses as the interest on your home mortgage, real estate taxes, charitable contributions, and possibly a portion of your medical expenses are greater than the standard deduction, you can lower your tax bill.
Is it better to claim 1 or 0 on your taxes?
Deciding whether it’s better to claim 1 or 0 on your taxes depends on your financial situation. By claiming 1, your take-home pay is higher during the year. However, you could owe taxes if you haven’t paid enough during the year. More money is withheld from your paycheck when you claim 0. When filing your tax return, you could end up with a larger refund or owing less in taxes than if you claimed 1.
Do you get a bigger refund if you make more money?
Your tax liability rises if you make more money. If you don’t like the idea of owing tax at the end of the year, you can claim fewer allowances to have more taxes taken out of your paycheck. If you are self-employed and make more money, you may have more business deductions you could take to lower your income and taxes owed.
How do I get a 10,000 tax refund?
You could end up with a $10,000 tax refund if you’ve paid significantly more tax payments than you owe at the end of the year.
Written by Anna Yen Anna Yen, CFA, has nearly 2 decades of experience in financial markets, primarily with JPMorgan and UBS. Currently, she manages digital assets and her goal at FamilyFI is to empower families with financial literacy. She’s worked in 5 countries and visited 57.
