The refund you get depends on what you paid in, what you owe, and which deductions and credits you claim
Your tax refund is not a gift from the government—it is money you overpaid during the year. The IRS withholds tax from your paychecks based on a form you fill out (the W-4), and if too much comes out, you get the difference back. To get the largest refund possible, you need to claim every deduction and credit you are may have access to to, make sure your withholding is set correctly for next year, and report all your income accurately.
The size of your refund is determined by three things: how much tax was taken from your paychecks or paid in quarterly payments, how much tax you actually owe based on your income and filing status, and which tax breaks you claim. Most people leave money on the table by missing deductions or credits they could have claimed, or by having too much withheld in the first place.
Key Takeaways
- Claiming every deduction and credit you may have access to for is the single biggest way to increase your refund, and many people miss credits worth hundreds or thousands of dollars.
- Common credits that go unclaimed include the Earned Income Tax Credit (EITC), Child Tax Credit, education credits, and the Saver's Credit for retirement contributions.
- Deductions reduce your taxable income, so itemizing deductions instead of taking the standard deduction can raise your refund if your deductible expenses are high enough.
- Adjusting your W-4 withholding after you file can prevent overpaying next year, which means a smaller refund but more money in your paycheck each month.
- Reporting all income—including side gigs, rental income, and investment gains—is required, and missing income can reduce your refund or trigger an audit.
Claim every tax credit you may have access to for
Tax credits are the most powerful tool for increasing your refund because they reduce your tax bill dollar-for-dollar. A $1,000 credit lowers what you owe by $1,000. The most commonly missed credits are the Earned Income Tax Credit (EITC), which can be worth up to $3,733 for a single filer or $3,995 for a married couple filing jointly (amounts vary by year and income), and the Child Tax Credit, which is $2,000 per child under 17.
Other credits that often go unclaimed include the American Opportunity Tax Credit (up to $2,500 per student for education expenses), the Lifetime Learning Credit (up to $2,000 per return), the Saver's Credit (for contributions to retirement accounts if your income is below a certain threshold), and the Dependent Care Credit (for childcare expenses). If you have a child, you may also may have access to for the Child and Dependent Care Credit if you paid for care so you could work.
To find out which credits apply to you, work through the IRS Form 1040 instructions or use tax software that asks you questions about your situation. The IRS website has a credits and deductions assistant tool that walks you through which ones you might may have access to for. Do not skip this step—missing a single credit can cost you hundreds of dollars.
Itemize deductions if your expenses are high enough
Most people take the standard deduction, which is a flat amount that reduces your taxable income. For 2024, the standard deduction is $14,600 for single filers and $29,200 for married couples filing jointly (these amounts change each year). If your deductible expenses add up to more than the standard deduction, you can itemize instead, which means listing out specific expenses and subtracting them from your income.
Deductible expenses include mortgage interest (not the principal), state and local taxes (capped at $10,000 total), charitable donations, medical expenses above 7.5% of your adjusted gross income, and certain business expenses if you are self-employed. If you own a home, have high medical bills, made large charitable donations, or had significant business expenses, itemizing may give you a larger deduction than the standard deduction and therefore a bigger refund.
To itemize, you file Schedule A with your tax return. Add up all your deductible expenses for the year. If the total is higher than the standard deduction for your filing status, itemize. If it is lower, take the standard deduction. Many people benefit from itemizing in years when they have a major expense like a large medical bill or a home purchase, but not in other years.
Report all income, including side work and investments
The IRS expects you to report every dollar you earned, whether it came from your main job, a side gig, rental property, investment gains, or any other source. If you do not report income, your refund will be smaller (or you may owe money instead), and you risk an audit or penalties.
Income sources that people often forget to report include freelance or contract work (reported on a 1099-NEC or 1099-MISC form), income from selling items online, rental income from a spare room or property, interest and dividends from investments, and cryptocurrency gains. If you earned more than $400 from self-employment, you must file a tax return and pay self-employment tax, even if you do not owe income tax.
Make sure you have received all the forms you are supposed to get by January 31st: a W-2 from each employer, a 1099-NEC or 1099-MISC from clients who paid you, a 1099-INT from banks for interest, a 1099-DIV for investment dividends, and a 1099-B for stock sales. If you do not receive a form you are expecting, contact the payer and ask for it. Then report all that income on your tax return.
Claim deductions for self-employment and business expenses
If you are self-employed or have a side business, you can deduct business expenses from your income, which lowers your taxable income and increases your refund. Deductible business expenses include supplies, equipment, a home office (if you have a dedicated space), vehicle mileage (at the IRS standard rate, which changes yearly), professional services, and rent or utilities for a workspace.
Keep receipts and records for all business expenses throughout the year. When you file, report your business income on Schedule C and list your deductible expenses. The difference between your income and your expenses is your net profit, which is what gets taxed. The more legitimate expenses you can document, the lower your taxable income and the larger your refund.
If you use part of your home for business, you can deduct a portion of your rent or mortgage interest, utilities, and insurance using the simplified method (currently $5 per square foot of dedicated office space, up to 300 square feet) or the actual expense method. Keep records of the square footage and your home expenses to support this deduction.
Adjust your withholding to avoid overpaying next year
A large refund feels good, but it also means you gave the government an interest-free loan all year. If you got a refund of $3,000 or more, you probably had too much tax withheld from your paychecks. You can adjust your W-4 to reduce withholding and get more money in each paycheck instead.
To adjust your withholding, fill out a new W-4 and give it to your employer's payroll department. The W-4 asks about your filing status, number of dependents, other income, and deductions. If you have a spouse who works, you can coordinate your withholdings so that the right amount comes out across both paychecks. The IRS has a withholding calculator on its website that estimates how much should be withheld based on your situation.
Adjusting your withholding does not change your current refund—that is based on what you already paid in. But it means less overpayment next year. If you want a smaller refund and more money throughout the year, adjust your W-4 after you file this return.
Contribute to retirement accounts before the filing deadline
Contributions to a traditional IRA or SEP-IRA (if you are self-employed) can be deducted from your income, which lowers your taxable income and increases your refund. You can make contributions for the current tax year up until the filing deadline (usually April 15th, or later if you file an extension).
For 2024, you can contribute up to $7,000 to a traditional IRA (or $8,000 if you are 50 or older). If you are self-employed, you can contribute up to 25% of your net self-employment income to a SEP-IRA, up to a maximum of $69,000. These contributions reduce your taxable income dollar-for-dollar, so a $5,000 IRA contribution lowers your taxable income by $5,000.
If you have earned income and have not maxed out your retirement contributions for the year, consider making a contribution before you file. It is one of the last ways to reduce your taxable income for the current year. Just make sure you have the money available and that you understand the rules for withdrawing it later.
File accurately and double-check your numbers
Mistakes on your tax return can delay your refund or trigger an audit. Before you file, verify that all your income figures match the forms you received (W-2s, 1099s, etc.), that your Social Security number and filing status are correct, and that you have claimed all the deductions and credits you are may have access to to.
If you are using tax software, it will catch many errors and walk you through the questions needed to claim credits and deductions. If you are filing by hand or working with a tax preparer, review the return carefully before signing. A small mistake can cost you hundreds of dollars in a missed refund or trigger an audit that takes months to resolve.
Once you file, you can track your refund status on the IRS website using the "Where's My Refund?" tool. It updates once a day and shows whether your return has been received, is being processed, or has been approved. If there is a problem, the IRS will contact you by mail.
Frequently Asked Questions
Can I claim a credit if I did not pay taxes?
Some credits are refundable, which means you can get money back even if you did not owe any tax. The Earned Income Tax Credit and the Additional Child Tax Credit are refundable. Other credits, like the education credits, are non-refundable and can only reduce what you owe to zero. Check the rules for each credit to see if it is refundable.
What if I made a mistake on my tax return after I filed?
You can file an amended return using Form 1040-X. You have three years from the original filing date to claim a refund you missed or correct an error. If the mistake reduces what you owe, file the amended return as soon as possible. The IRS will process it and send you the additional refund.
Does claiming more deductions increase my refund?
Only if the deductions are real and you can document them. Deductions reduce your taxable income, so claiming deductions you are not may have access to to is tax fraud and can result in penalties, interest, and criminal charges. Claim only the deductions and credits you actually may have access to for based on your income and expenses.
Should I aim for a big refund or break even?
Breaking even (owing nothing and getting nothing back) means your withholding was correct and you had the right amount of money throughout the year. A large refund means you overpaid and gave the government an interest-free loan. Most people prefer to get a refund because it feels like a bonus, but financially it is better to adjust your withholding so you get more money in each paycheck.
Can I increase my refund by claiming dependents I do not have?
No. Claiming dependents you do not have is tax fraud. You can only claim someone as a dependent if they lived with you for the entire year, you paid more than half their living expenses, and they meet other IRS requirements. The IRS matches dependent claims against Social Security numbers and will catch false claims.