How to Get a Bigger Tax Refund? Check the Strategies and Considerations!

Maximise tax refund with strategies and considerations. In 2024, new IRS brackets may boost refunds, possibly up to 10% more than last year, according to experts.

How to Get a Bigger Tax Refund?

When it comes to maximising your tax refund, there are several strategies and considerations that can help you secure a larger refund. 

Tax refunds in 2024 could be larger than the previous year due to new IRS brackets. Some experts mentioned that individuals might receive up to 10% more than the previous year.

With careful planning and strategic deductions, however, you can maximise your tax benefit and potentially increase your refund amount. 

• Additional Child Tax  Credit Refund Date
• IRS2Go Refund Status
• SUSI Payment Date

Strategies to Get a Bigger Tax Refund

Here are some key strategies to consider to get a bigger tax refund:

Know Your Filing Status:

• Choosing the right filing status significantly impacts your tax liability and potential refund. 
• Common options include single, married filing jointly, married filing separately, head of household, and qualifying widow(er). 

Claim Eligible Deductions:

• Deductions directly reduce your taxable income, potentially leading to a larger refund. The two main categories are standard deductions and itemised deductions. 
• The standard deduction is a fixed dollar amount set by the IRS and often the simpler option. 
• However, if your itemised deductions (like mortgage interest, charitable contributions, and certain medical expenses) exceed the standard deduction, you might benefit from itemising. 

Explore Tax Credits:

• Unlike deductions, tax credits directly reduce the amount of tax you owe dollar-for-dollar. 
• Some common examples include the Earned Income Tax Credit (EITC), Child Tax Credit, and American Opportunity Tax Credit. 
• Eligibility requirements vary, so carefully review the IRS website to determine which credits you qualify for.

Contribute to Retirement and Health Savings Accounts:

• Contributions to certain accounts, like traditional IRAs, 401(k)s, Health Savings Accounts (HSAs), and Flexible Spending Accounts (FSAs), are often tax-deductible. 
• This lowers your taxable income, potentially increasing your refund. 

Review Withholding Allowances:

• Your employer withholds taxes from your paychecks based on your W-4 form selections. 
• If you constantly receive large refunds or owe taxes at year-end, consider adjusting your W-4 allowances using the IRS Withholding Estimator. 

Seek Professional Guidance (Optional):

• Tax laws can be complex, and navigating them independently can be overwhelming. 
• If you have a complicated financial situation, own a business, or have significant investments, consider consulting a qualified tax professional. 

New IRS Brackets that could increase your refund this year

The 2024 tax brackets were adjusted for inflation, resulting in increases of approximately 5.4% compared to the 2023 brackets. This means that if your income remained consistent in 2023 compared to 2022, you might be in a lower tax bracket in 2024, potentially leading to a larger refund when you file your tax return.

Single filers and married couples filing jointly:

Single Filers:

• Taxable income less than or equal to $11,600: 10% tax rate
• Taxable income between $11,601 and $47,150: 12% tax rate
• Taxable income between $47,151 and $100,525: 22% tax rate
• Taxable income above $100,525: 24% tax rate

Married Filing Jointly:

• Taxable income less than or equal to $23,200: 10% tax rate
• Taxable income between $23,201 and $94,300: 12% tax rate
• Taxable income between $94,301 and $201,050: 22% tax rate
• Taxable income above $201,050: 24% tax rate

Some tax credits to Increase your Refund

Here are some tax credits that can potentially increase your tax refund in 2024:

Earned Income Tax Credit (EITC): 

• This refundable credit is available to low- and moderate-income workers and families. 
• The amount of the credit you receive depends on your income, filing status, and the number of qualifying children you have.

Child Tax Credit: 

• This credit is available to taxpayers with qualifying children under the age of 17. 
• The amount of the credit is generally non-refundable, meaning it can only reduce your tax liability to zero, but cannot create a refund. 
• However, if the credit amount exceeds your tax liability, a portion may be refundable.

American Opportunity Tax Credit: 

• This credit helps offset education expenses for qualified higher education students. 
• The credit is partially refundable, meaning it can reduce your tax liability to zero and provide a refund for any remaining amount.

Additional Child Tax Credit: 

• This credit is available to qualifying taxpayers who care for a dependent under the age of 19 or a disabled dependent of any age. 
• The credit is non-refundable, but it can reduce your tax liability.

Saver’s Credit: 

• This credit is available to low- and moderate-income individuals who contribute to a retirement account, such as an IRA or a 401(k). 
• The credit provides a percentage of your contributions back as a tax credit.

Health Coverage Tax Credit: 

• This credit helps individuals and families afford health insurance purchased through the Health Insurance Marketplace.