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How to Maximize Your Tax Refund

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How To Maximize Your Tax Refund

Looking for ways to maximize your tax refund come April 15? Check out these tips.

Build Your Retirement Savings

Contributing to a 401(k) plan offered by an employer is a nifty way to shield income from taxes and build up savings for the future. Making contributions to an individual retirement account works, too. With a traditional IRA or a 401 (k) plan, your contributions are made with pre-tax dollars, which helps to lower your taxable income for each tax year that you contribute to the plans.

Pay for Medical Expenses With a Flexible Spending Account

A flexible spending account allows you to set aside part of your salary on a pre-tax basis for medical expenses and for child and dependent care. Many employers offer FSAs and they can be a valuable tool for lowering your tax bill by shielding the money you pay for medical and child care expenses from taxes.

Deduct Medical Costs

Get a tax deduction for all the medical bills you’ve paid in the previous year. Medical expenses include health insurance premiums, dental care, eye care and glasses, mental health counseling and driving to and from doctor visits and other medical appointments. For the 2014 tax year, qualified medical expenses that exceed 10% of your adjusted gross income (AGI) can qualify for a deduction, unless you are age 65 or older, in which case the threshold is 75% of AGI.

Make Charitable Donations

Clean out the closets, donate an old car instead of trading it in at the dealership, make financial contributions to your favorite charities, all these things may be tax-deductible.

Giving to charities can help to trim your tax liability and boost the amount of any refund coming your way. Make sure you give your donations to a qualified charity and keep good records. You’ll need to itemize your charitable donations on a 1040 tax return using Schedule A.

Updated on January 22, 2015

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  • MarieB

    I am a solo parent and i send my son to college,but for me to be able to afford his college, i have to work two jobs.H& R block said I cannot get the American Opportunity credit because my 2 incomes exceed the tax bracket ( $90,000). How can I afford to send a child to college if i don’t work 2 or 3 jobs, why can’t the government look at my full time job income only so i could get the American opportunity credit ( spent too much for board and lodging,misc. allowances)

  • James

    Marie B , It is not your job to send your son to college. Try two years of Jr. college and the last two years at a four year college and you can also have him live at home. Scholarships also work well. My three sons did it on their own.

  • LJ

    Sure you can put money into an IRA Traditional and get a deduction….the only thing is some/all/or none of it may be deductible….and to figure that out is VERY confusing! You can figure it out three times and get 3 answers….
    Any comments on which is the best tax software to use???
    Have been doing my own taxes w/no issues for 25 years…now I need help!!!

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