6 Proven Strategies to Boost Your Tax Refund

Tax season doesn’t have to be a source of stress—it can be an opportunity. A bigger tax refund gives you more financial breathing room, whether you want to pay off debt, grow your savings, or cover an upcoming expense.

With a bit of planning and know-how, you can maximize your upcoming tax return. From retirement contributions to adjusting your withholding and claiming deductions and credits, here are key tax strategies to get more of your money back.

1. Adjust Your Tax Withholding

Withholding is the federal income tax taken from your paycheck. Your W-4 form tells your employer how much to withhold. Increasing your withholding amount means you’ll get lower paychecks throughout the year but a larger refund at tax time.  

Increasing your tax withholding can make sense in certain situations, like if you expect a large tax bill from investments or self-employment income. Life changes, like marriage or divorce, can also impact your tax status and lead to a bigger bill. A larger withholding amount puts aside money to cover those taxes.

You can adjust your withholding at any time by updating line 4(c), Extra Withholding, on W-4, and submitting the form to your employer. But be careful with this strategy. 

“When interest rates are in the highest range they have been in for two decades, it isn’t smart to increase withholding and get a big refund,” said Crystal Stranger, Enrolled Agent and CEO at Optic Tax. She continued, “That is akin to giving an interest-free loan to the government. Setting up an automated monthly payment into a retirement account or savings account is a much better way to set money aside than increasing withholding.”

2. Contribute to Retirement Accounts

Saving for retirement is good for your future self—and it can also boost your tax return now. Every dollar you contribute to a traditional IRA, 401(k), or other tax-deferred account reduces your taxable income, potentially increasing your refund. Each option comes with its own rules and contribution limits. 

401(k)

Traditional 401(k) contributions come out of your paycheck before taxes, which lowers your taxable income. The earnings grow tax-free until you withdraw them, and your employer may also contribute to your account.

For 2025, you can contribute $23,500 if you’re under age 50. Catch-up contribution limits for 2025 are $7,500 for ages 50 to 59 and 64 or older (for a total contribution of $31,000) and $11,250 for ages 60 to 63 (for a total contribution of $34,750). 

Traditional and Roth IRAs

IRAs are one of the easiest ways to save. Contributions to a traditional IRA may be fully or partially tax-deductible, depending on your income and filing status. While Roth IRA contributions aren’t tax-deductible now, you won’t pay tax on withdrawals in retirement. When choosing between a traditional or a Roth IRA, you need to decide—do you prefer to have the tax break now or later? 

For 2025, the IRA contribution limit is $7,000 (or $8,000 if you’re 50+), and you have until April 15, 2026, to make contributions for the 2025 tax year. Roth contributions limits may be reduced or phased out depending on your modified AGI. In 2025, your modified AGI must be under $150,000 to make a full Roth IRA contribution.

SIMPLE and SEP IRAs

SIMPLE (Savings Incentive Match Plan for Employees) and SEP IRAs (Simplified Employee Pension) help self-employed people and small business owners save for retirement with major tax benefits. 

Contributions to these accounts come from pre-tax dollars, which lowers your taxable income and reduces your tax bill. A smaller tax bill can also mean a bigger refund. Earnings grow tax-deferred, allowing them to compound more over time.

Employees can contribute up to $16,500 to a SIMPLE IRA in 2025. Catch-up contributions bring that number up to $20,000 for those aged 50-59 and $21,750 for ages 60-63.

For SIMPLE IRAs, employers must either match employee contributions dollar-for-dollar up to 3% of compensation or make a non-elective contribution of at least 2% of each eligible employee’s compensation.

You can contribute to both account types until the previous tax year’s tax filing deadline (April 15, 2026).

3. Take Advantage of Tax Credits

The tax code includes multiple credits designed to save you money. A tax credit lowers your IRS tax bill dollar for dollar. For instance, if your tax liability is $4,500 and you qualify for a $1,200 credit, your bill decreases to $3,300.

Here are a few of the most common tax credits:

Earned Income Tax Credit 

If you have low to moderate income and a valid Social Security number, you may be able to claim the Earned Income Tax Credit (EITC). The amount of your credit may change if you have children or dependents, are disabled, or meet other criteria.

For example, if you have three or more qualifying children and an AGI of $61,555 or less (when filing as single, head of household, married filing separately, or widowed), you could get a tax credit of up to $8,046. For married filing jointly with three qualifying children, your AGI must be less than $68,675.

Child Tax Credit 

The Child Tax Credit (CTC) gives you back up to $2,000 per dependent child under 17. Like other credits, the CTC lowers your total taxes owed on a dollar-for-dollar basis. However, the credit phases out at higher income levels.

For the 2025 tax year, the income thresholds for the CTC remain the same as in 2024. This means you qualify for the full amount for each qualifying child if you meet all eligibility factors and your annual income is not more than $200,000 ($400,000 if filing a joint return).

Education Credits

There are two main education tax credits available: the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC).

The AOTC is worth a maximum of $2,500 per eligible student. To be eligible, the student must be in the first four years of post-secondary education and enrolled at least half-time.

Up to $1,000 of the credit is refundable if the credit brings the amount of tax you owe to zero. The AOTC phases out for single filers with a modified AGI between $80,000 and $90,000 (or between $160,000 and $180,000 for joint filers).

The LLC is worth up to $2,000 per tax return, calculated as 20% of the first $10,000 in eligible expenses. It’s available for undergraduate, graduate, and professional degree courses, including those taken to acquire or improve job skills. There’s no limit on the number of years you can claim the credit. This credit phases out for single filers with a modified AGI between $80,000 and $90,000 (between $160,000 and $180,000 for joint filers).

4. Itemize Deductions When It Makes Sense

Standard deduction and itemized deductions are two methods of reducing taxable income and the amount of tax you owe. The standard deduction is a fixed dollar amount based on your filing status, while itemized deductions let you deduct specific expenses from your AGI.

In general, most people take the standard deduction since it requires no calculation. You just need to know your tax filing status. For example, the standard deduction amounts for 2025 are:

• $15,000 for single filers
• $30,000 for married filing jointly
• $22,500 for head of household

Using the itemized deduction lets you deduct specific expenses, which can be to your advantage if they exceed the standard deduction amount.

“The simplest, and usually right, rule is to choose whatever the bigger deduction is, be it itemized or standard. The bigger the deduction, the lower your tax bill, and within a single tax year, that’s the goal,” said Meg Bartelt, CFP and founder of Flow Financial Planning.

For example, in 2025, if a married couple filing jointly has $32,000 in itemizable expenses, they should itemize since it’s greater than the $30,000 standard deduction. 

Some common itemized deductions include:

• Mortgage interest
• State and local income taxes
• Charitable donations:
• Medical or dental expenses

Charitable donations are uniquely flexible, making it easier to adjust your deduction from year to year. 

“One useful strategy for regular givers: ‘bunching’ strategy,” said Bartelt. “When you ‘bunch,’ you make multiple years (say three years) of [charitable] contributions in a single year, so you have a lot of itemized deductions in that one year. In the subsequent two years, you make no charitable contributions and take the standard deduction. Altogether, this gives you more deductions over three years than if you’d spread the charitable contributions out evenly over three years.”

5. Look for Other Potential Deductions

Certain deductions offer more chances to shrink your taxable income, including student loan interest, HSA contributions, and business expenses for freelancers. Each of these are “above-the-line” deductions, meaning they trim your taxable income on top of either the standard or itemized deduction.

Student Loan Interest

If you’re paying off a student loan, you can deduct up to $2,500 in interest paid during the tax year. If you paid at least $600 of interest on a qualified student loan during the year, you’ll receive a Form 1098-E as a statement of the amount paid.

Business-Related Expenses

If you freelance or own a small business, you can deduct various business-related expenses, including:

• Office supplies and equipment
• Travel expenses
• Professional development
• Home office expenses
• Internet and phone service

Keep digital or physical receipts for business expenses and note expense dates, merchant names, amounts, and what you purchased. 

HSA Contributions

You can only contribute to a Health Savings Account (HSA) if you have a High Deductible Health Plan (HDHP). With an HSA, you get a triple tax benefit:

• Contributions are tax-deductible 
• Interest and earnings on the account assets grow tax-free
• Withdrawals for qualified medical expenses are tax-free

For 2025, the HSA contribution limits are $4,300 for individuals and $8,550 for families. Keep track of personal and employer contributions, as you’ll need to report them on Form 8889.

6. Keep Records and Plan Throughout the Year

Stay organized and start planning early to maximize tax deductions and credits. Accurate records prove your reported income, deductions, and credits while saving you time during filing. 

Early planning helps you qualify for tax benefits, time payments, or contributions to reduce taxable income for the year and make smart investment choices to manage tax liability. Plus, the sooner you know your tax liability, the better you can plan and budget for payments.

Retirement account contributions should be easy to track using your online banking or brokerage account. You should also keep records of things like HSA contributions, business expenses, and energy-efficient home improvements. Use online tools and apps to help you stay organized, including: 

• Mobile apps with receipt scanning features 
• Cloud-based accounting software 
• Digital expense trackers 
• Spreadsheet templates for manual tracking

The Bottom Line

Boosting your tax refund starts with staying informed and planning ahead. Regularly review your financial goals, adjust your tax strategies to match, and stay updated on tax law changes.

Don’t wait until tax season—take proactive steps throughout the year to make tax time smoother and more rewarding. A solid tax strategy reduces stress, increases savings, and makes sure you’re maximizing every dollar. And planning ahead doesn’t just boost your refund—it strengthens your long-term financial health.