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Are you one of the many Americans who view your tax return as a beginning-of-the-year bonus? If so, you’re not alone. According to IRS data, roughly 64% of taxpayers received a refund in 2024, and for many households, that lump sum plays a big role in kicking off the year.
Your tax return is calculated based on how much you paid in federal income tax throughout the year versus how much you actually owed. If you overpaid, you get the difference back in a refund.
While the ideal scenario is to break even, meaning you paid just the right amount, not everyone views it that way. If your goal is to get a bigger tax return next year, it starts with planning ahead now.
In this blog, we’ll give you an inside look at how to increase your refund, including adjustments to your withholdings, maximizing credits and deductions, and smart ways to use your refund once it arrives.
Let’s start by talking about tax withholdings, those confusing numbers you need to enter on your W-4. When you start a new job (or update your tax info), your employer uses your W-4 form to determine how much federal income tax to withhold from each paycheck.
The more allowances or exemptions you claim, the less tax is withheld. If you want a larger refund, you may choose to have more withheld throughout the year by adjusting your W-4 accordingly.
To see if your current settings are on track, use the IRS Withholding Estimator. It walks you through a few questions about your income, household situation, and deductions to help you figure out if you’re withholding too much, too little, or just enough.
By choosing to withhold a bit more each pay period, you’re likely to receive a bigger refund when tax time rolls around.
The next thing you might want to do is maximize your tax credits. This can have a much greater impact on your refund than your tax deductions alone. Tax credits reduce the amount of tax you owe and may even be refundable, meaning you can receive money back even if you owe nothing.
Here are a few tax credits to look into:
To find tax credits that apply to your situation, check the IRS website or speak with a tax professional. Your eligibility may depend on factors like income level, family size, education expenses, or changes in employment. Taking time to review these options early can help you claim everything you qualify for, potentially increasing your refund by hundreds or even thousands of dollars.
Another effective way to grow your refund is by increasing your tax-deductible contributions. Contributions to a traditional IRA or 401(k) reduce your taxable income, which can lower your tax bill and increase your refund. If your employer offers a 401(k) plan, consider contributing more, especially if they match a portion.
You can also contribute to a Health Savings Account (HSA) if you have a high-deductible health plan, or a Flexible Spending Account (FSA) if your employer offers one. These accounts let you set aside pre-tax money for medical expenses, further lowering your taxable income.
Finally, charitable donations may qualify as deductions. Just be sure to keep receipts and itemize your deductions if you plan to claim them. Every dollar you contribute to these accounts or causes has the potential to reduce your taxable income and help you qualify for a larger refund.
If you want a bigger tax return, staying organized throughout the year can make all the difference. Keep records of deductible expenses like medical bills, charitable donations, business costs, or job-related purchases. The more detailed your records, the easier it is to claim every eligible deduction.
Use tools like budgeting apps, receipt trackers, or even a simple folder system, digital or paper, to stay on top of things. Categorize receipts monthly so you’re not scrambling come tax season. Good organization now means fewer missed deductions and a smoother, more rewarding filing experience later.
Your filing status and the number of dependents you claim can directly affect both your tax refund and how much is withheld from your paycheck throughout the year. Choosing the most beneficial filing status, such as Head of Household instead of Single, can result in a lower tax rate and higher standard deduction, which may increase your refund.
If you have eligible dependents, such as children or even qualifying relatives, be sure to claim them. Doing so can unlock valuable credits like the Child Tax Credit or Earned Income Tax Credit, both of which can significantly boost your return.
It’s also smart to update your W-4 if your filing status or dependent count changes during the year. Adjusting your withholdings now ensures you’re setting yourself up for a more accurate and potentially larger refund at tax time.
One of the most effective ways to boost your refund is by using trusted tax software or working with someone who knows how to spot overlooked deductions. Whether you prefer to file on your own with online tools or want guidance from a professional, the key is finding a resource that fits your situation and helps you uncover all available credits and deductions.
At Credit Central, we offer tax preparation services to help make filing simpler and more accurate. You can also benefit from a mid-year tax review to adjust your withholdings or prepare for any major changes before the next tax season rolls around. With the right help and a little planning, you’ll be in a stronger position to get the biggest refund possible, without scrambling at the last minute.
Getting a bigger tax return next year starts with the steps you take today, adjusting withholdings, tracking expenses, and maximizing credits and deductions. Whether you're filing on your own or need extra support, Credit Central’s tax preparation services can help make the process easier. With the right strategy in place, you’ll be ready for a smoother, more rewarding tax season. Find a branch or check out our online services today to get started.
