The refund you get depends on what you paid in, what you earned, and which deductions and credits you claim

Your tax refund is not a gift from the government—it is your own money that you overpaid in taxes during the year. The size of your refund depends on three things: how much tax was withheld from your paychecks, how much tax you actually owe based on your income and filing status, and which deductions and tax credits you report on your return. Most people cannot change what they already paid in, but you can change what you owe by claiming every deduction and credit you are may have access to to.

The difference between a deduction and a credit matters. A deduction reduces the income the IRS counts, which lowers your tax bill by a percentage. A credit reduces your tax bill dollar-for-dollar, so a $1,000 credit saves you $1,000 in taxes. Credits are almost always worth more than deductions of the same amount.

Key Takeaways

  • Your refund size is determined by how much tax was withheld from your pay, minus what you actually owe—so claiming every credit and deduction you may have access to for directly increases your refund.
  • Tax credits like the Earned Income Tax Credit and Child Tax Credit reduce your tax bill dollar-for-dollar and often produce refunds even if you owe no tax.
  • Deductions like the standard deduction, mortgage interest, and charitable donations reduce your taxable income, but only help if you itemize instead of taking the standard deduction.
  • Your filing status, number of dependents, and income level determine which credits and deductions are available to you.
  • The IRS Free File program lets you file for free if your income is below a certain threshold, and many tax software companies offer free versions for simple returns.

Understand the difference between the standard deduction and itemizing

Every taxpayer gets to reduce their taxable income by either the standard deduction or by itemizing deductions—you choose whichever is larger. For the 2024 tax year, the standard deduction is $14,600 for single filers, $29,200 for married filing jointly, and $21,900 for head of household. These amounts change each year.

Itemizing means adding up specific deductions like mortgage interest, property taxes, charitable donations, and medical expenses. You only come out ahead by itemizing if your total itemized deductions exceed the standard deduction. Most people take the standard deduction because their itemized deductions do not add up to more. If you own a home with a mortgage, donate regularly to charity, or pay high state and local taxes, you are more likely to benefit from itemizing.

To know whether to itemize, add up your mortgage interest, state and local taxes (capped at $10,000), charitable donations, and medical expenses above 7.5% of your adjusted gross income. If that total is larger than your standard deduction, itemize. If not, take the standard deduction and move on to finding credits.

Claim every tax credit you may have access to for

Tax credits are the fastest way to increase your refund because they reduce your tax bill directly. The most common credits are the Earned Income Tax Credit (EITC), the Child Tax Credit, the American Opportunity Tax Credit, and the Lifetime Learning Credit.

The EITC is worth up to $3,995 for single filers and up to $3,733 for married filers in 2024, depending on your income and whether you have children. You do not need children to claim it, but the credit is larger if you do. The EITC often produces a refund even if you owe no tax, which is called a refundable credit. The Child Tax Credit is worth up to $2,000 per child under 17, and part of it is refundable. If you paid for college tuition or student loan interest, the American Opportunity Tax Credit (up to $2,500) or Lifetime Learning Credit (up to $2,000) may reduce your bill further.

Other credits exist for adoption expenses, energy-efficient home improvements, and dependent care costs. The IRS website lists all available credits, and most tax software will ask you questions to determine which ones you may have access to for.

Report all sources of income, including side work and interest

Your refund is based on your total income, so missing income sources means you may pay more tax than necessary or miss out on credits you could have claimed. Report wages from your W-2, self-employment income from 1099 forms, interest and dividends, rental income, and any other money you received. If you did gig work through apps or platforms, you should receive a 1099-NEC or 1099-K if you earned over a certain threshold, but you are required to report the income even if you do not receive a form.

Self-employment income is taxed at a higher rate than wages because you pay both the employee and employer portion of Social Security and Medicare tax. However, you can deduct business expenses—supplies, equipment, mileage, home office rent—to reduce your taxable self-employment income. Keep receipts and records of all business expenses so you can claim them.

Adjust your withholding if you consistently get large refunds

If you get a refund of $1,000 or more every year, you are having too much tax withheld from your paychecks. That money could be in your bank account now instead of waiting for a refund. To change your withholding, fill out a new Form W-4 with your employer. The form asks about your income, dependents, and other jobs, and calculates how much should be withheld each pay period.

The IRS provides a withholding calculator on its website that estimates the right amount. If you adjust your withholding mid-year, you will see the change in your next paycheck. This does not reduce your refund for the current year—it prevents overpaying in future years.

File your return as soon as you have all your documents

The sooner you file, the sooner you receive your refund. The IRS begins accepting returns in late January each year. If you are owed a refund and file electronically, you typically receive it within 21 days, though it can take longer if the IRS needs to review your return or if you chose a payment method that takes extra time.

Gather your W-2s from employers, 1099 forms for other income, receipts for deductions if you itemize, and records of any tax payments you made. If you file by paper, processing takes much longer—typically 4 to 6 weeks or more. Electronic filing is faster and more accurate because the software catches common errors before you submit.

Use free filing options if your income qualifies

The IRS Free File program lets you file for free if your income is below a certain threshold—$79,000 for the 2024 tax year. Participating tax software companies provide free federal returns, though state returns may have a fee. You can find the list of participating companies on the IRS website.

If your income is above the Free File threshold, many tax software companies offer free versions for simple returns—usually returns with only W-2 income and no itemizing. Compare the free options available before paying for software. If your situation is complex, a tax professional or CPA can find deductions and credits you might miss, and the cost of their service often pays for itself in a larger refund.

Frequently Asked Questions

Can I claim dependents who do not live with me?

Yes, if you provide more than half their financial support for the year and they meet other IRS tests. You must have their Social Security number and they cannot claim themselves on another return. The relationship test varies—children, siblings, parents, and some other relatives may have access to, but the person must be a U.S. citizen, national, or resident alien.

What if I made a mistake on last year's return?

File an amended return using Form 1040-X within three years of the original filing date to claim a refund you missed or correct an error. The IRS will process it and send you the additional refund you are owed. If you owe more because of the correction, you will receive a bill.

Do I have to report income from a side job if it was under $400?

Self-employment income under $400 does not require you to file a Schedule C, but you still must report it on your return if you file one. If your total income is below the filing threshold for your age and status, you may not have to file at all—but filing might get you a refund even if you do not owe tax.

What happens if I claim a credit I do not may have access to for?

The IRS will disallow the credit and reduce your refund or send you a bill for the difference. If the error was unintentional, you may owe interest and penalties. Always double-check the requirements for each credit before claiming it, or use tax software that verifies your answers.