How to get a bigger tax refund, according to experts
Tax season, for many, conjures kitchen-table drudgery spent revisiting pay stubs and financial choices. For some, though, a reward awaits: a tax refund.
The possibility and scale of a refund can hinge on the approach taken by a tax filer, financial advisors told ABC News.
Tax credits, retirement account contributions and deductibles are among the avenues that determine whether taxpayers receive money back from the U.S. government, they said.
Here's what to know about how to get a bigger tax refund, according to experts:
Choose the deduction that's right for you
Tax season presents filers with a choice about how to pursue deductions.
MORE: What's new for tax filing in 2024
Every taxpayer enjoys the opportunity to avail themselves of the standard deduction, which reduces a filer's taxable income by a set amount. This year, the standard deduction for a single filer amounts to $14,600; while married filers can deduct $29,200.
On the other hand, filers can opt to itemize their deductions if the combined amount exceeds that available to them under the standard deduction. Charitable donations, gambling losses and mortgage interest are among the expenses available for itemized deductions, the Internal Revenue Service website says.
The standard deduction expanded under the tax overhaul enacted by Trump in 2017, making that option the preferable one for most filers, Dan White, an author and founder of the financial advisory firm Daniel A. White & Associates, told ABC News.
"We see very few people itemize anymore," White said.
However, White added, taxpayers who opt for itemized deductions should plan to take on all eligible expenses in the same calendar year, thereby maximizing the total deduction.
"If you want to go that route, look at bunching all of your deductions in a single year," White said.
Take advantage of tax credits
A laser-eyed focus on tax deductions risks overlooking another source of savings: tax credits.
"Everyone typically thinks of itemizing their deductions to increase the return, but many people forget to check tax credits, which can make a big difference," Gregory King, a certified public accountant and tax specialist with financial advisory firm Empower, told ABC News.
For instance, filers can again take advantage of an electric vehicle tax credit put into effect by the Inflation Reduction Act.
Individuals can obtain an EV tax credit of up to $7,500 if they purchase an eligible vehicle and earn less than $150,000. Since the credit is nonrefundable, a filer cannot gain more from the credit than they owe in taxes.
Another tax credit enacted by the IRA, which allows homeowners to upgrade their residence's energy efficiency, has expanded this year. Earners who take advantage of the tax credit can receive a refund equivalent to 30% of the cost of renovations.
The child tax credit, meanwhile, affords up to $2,000 per child for filers with dependents under 17.
Some taxpayers may also benefit from a potential expansion of the child tax credit. Earlier this month, the House passed a bill that would increase the child tax credit to as much as $3,600 for some filers, raising it significantly from its current level of $2,000.
At least for now, the measure hovers in legislative limbo, awaiting a vote in the Senate. If the credit ultimately goes into effect, IRS officials will automatically apply it to qualifying earners.
"The child tax credit is a big one," James Cox, a financial advisor and managing partner of Virginia-based Harris Financial Group, told ABC News. "That can create thousands of dollars for a family."
Contribute to a retirement account
Another surefire way to achieve tax savings is a contribution to a retirement account -- and it's not too late to start.
Contributions are tax deductible for a range of accounts such as 401(k)'s and traditional IRA's.
Through the end of the tax filing period, on April 15, such contributions will count toward deductions from the prior year's taxes.
MORE: IRS to open its free tax filing site to more new users
"You can make a contribution, keep all money in your own IRA account and reduce your taxes," Cox said. "It's kind of a double benefit."
Make a donation
Tax-deductible donations offer a common and accessible route for shaving your tax bill, if you have excess income to share, experts said.
It's too late, however, to make donations that would alter a tax refund this time around.
"You can't make donations now and count them toward a prior year's taxes," Cox said. "That won't work."
How to get a bigger tax refund, according to experts originally appeared on abcnews.go.com