Filing your taxes isn’t fun, but it’s a necessary part of life for most Americans. The good news? Most tax filers receive a tax refund, which may give you something to look forward to as we head into tax season. In this article we’ll show you how you can get the maximum tax refund in 2023.
While the IRS will always tell you if you owe them more money than you claim, they may not let you know if you’re eligible for a tax break you forgot to claim. It’s up to you to stay informed about the top tax deductions and credits that can help maximize your refund. Luckily, we’re here to help.
Since many pandemic-era tax benefits are returning to their regular amounts, you should also prepare for a smaller refund in years past, but that doesn’t mean there aren’t ways to make sure you get all the money you’re owed.
Here are some tips you should know about boosting your tax refund this year:
1. Review common tax deductions and credits
Do you have a child or dependent? You may be eligible for a tax break by claiming the Child Tax Credit (CTC) and/or Child and Dependent Care Credit. You could earn up to $2,000 per eligible dependent with the CTC or up to $3,000 (for one child) or up to $6,000 (for multiple children) with the Child and Dependent Care credit.
Although not all tax credits are refundable, meaning they may lower your taxes but won’t carry over and increase your refund, lowering the amount you’ll pay in taxes can have a positive impact on 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 either 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 even ongoing education to improve your skills are all common business expenses you can claim to 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.
That said, 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 IRA or HSA for the previous year (2022) 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 refund 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 2022 HSA or IRA. Don’t leave money on the table this tax season.
Learn how you can become eligible to file your taxes in the MoneyLion app for free!
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