Simple Steps to Boost Your Return This Tax Season

Tax season can feel overwhelming, but with the right approach, it becomes an opportunity to improve your financial health. Whether you are an individual taxpayer or a small business owner, understanding how to maximize your refund can put more money back in your pocket. This guide breaks down practical strategies that help you save while staying compliant with IRS rules.

Many people leave money on the table simply because they do not know which deductions and credits they qualify for. The average tax refund in 2024 was $3,145 according to the IRS, but this amount varies depending on your situation and tax planning. With smart strategies throughout the year, you can potentially increase your refund and lower your overall tax bill.

Understanding Tax Deductions and Credits

Before diving into specific tactics, it is important to understand the difference between deductions and credits. Deductions reduce your taxable income, while credits reduce your tax bill directly. Both are valuable, but credits generally save you more.

For example, if you are in the 22% tax bracket and claim a $1,000 deduction, you save $220 in taxes. A $1,000 credit, however, reduces your taxes by the full $1,000. Knowing this difference helps you prioritize the most impactful benefits.

Key Deductions for Individuals

The standard deduction for 2024 is $14,600 for single filers and $29,200 for married couples filing jointly. If your itemized deductions exceed these amounts, you may benefit from itemizing.

Common deductions include:

• State and local taxes (up to $10,000)
  
  
• Mortgage interest on loans up to $750,000
  
  
• Charitable contributions
  
  
• Medical expenses exceeding 7.5% of your adjusted gross income
  
  
• Home office expenses if you are self-employed
  
  

Keeping records throughout the year is essential. Using digital tools can help you organize receipts and avoid missing eligible deductions.

Maximizing Credits for Bigger Refunds

Tax credits provide some of the best opportunities for savings. The Earned Income Tax Credit (EITC) offers substantial benefits for lower and moderate-income workers, with maximum credits of $7,430 for families with three or more children in 2024.

Education-related credits are also valuable. The American Opportunity Tax Credit provides up to $2,500 per student, while the Lifetime Learning Credit offers up to $2,000 per return. Both can be applied to you, your spouse, or your dependents.

Other notable credits include:

• Child Tax Credit: up to $2,000 per child under 17
  
  
• Child and Dependent Care Credit: up to $3,000 for one child or $6,000 for two or more children
  
  

Small Business Tax Strategies

Business owners have unique opportunities to reduce taxable income. The Section 199A deduction allows eligible businesses to deduct up to 20% of qualified business income.

You can also benefit from equipment purchases through Section 179 deductions or bonus depreciation. For 2024, up to $1,220,000 in equipment can be deducted immediately.

Other common deductions include:

• Home office expenses
  
  
• Business meals (50% deductible)
  
  
• Training and professional development
  
  
• Business insurance premiums
  
  
• Marketing and advertising costs
  
  

Retirement Contributions as a Tax Tool

Retirement planning is also tax planning. Contributions to a traditional IRA are deductible up to $7,000 ($8,000 if over 50). For 401(k) plans, the limit is $23,000 ($30,500 with catch-up contributions).

Small business owners can take advantage of SEP-IRAs or Solo 401(k)s, which allow much larger contributions. These accounts reduce taxable income while helping you build long-term security.

You can contribute to an IRA until the tax filing deadline, which gives you flexibility in managing your tax strategy.

The Benefits of Health Savings Accounts

Health Savings Accounts (HSAs) offer triple benefits. Contributions are deductible, funds grow tax-free, and withdrawals for qualified medical expenses are also tax-free.

For 2024, the contribution limits are $4,300 for individuals and $8,550 for families, with an extra $1,000 allowed if you are over 55. An HSA requires a high-deductible health plan, but the long-term tax advantages can be significant.

Timing Income and Expenses

The timing of income and expenses can impact your tax results. If you expect to be in a lower bracket next year, consider deferring income and accelerating deductible expenses. On the other hand, if higher taxes are likely in the future, you may want to accelerate income and defer expenses.

Making charitable donations before year-end or moving up business purchases are common ways to improve your tax position.

Keeping Accurate Records

Good record-keeping supports all of your deductions and credits. The IRS recommends keeping records for at least three years, though some situations require longer. Maintain receipts, bank statements, property records, and previous returns. Digital storage makes it easier to stay organized and ready for tax time.

When to Get Professional Help

Many simple returns can be done on your own, but professional help is valuable in more complex situations. Consider hiring a tax professional if you:

• Own a business or have multiple income sources
  
  
• Have large investments or losses
  
  
• Are facing an audit
  
  
• Have major life changes like divorce or inheritance
  
  
• Want advanced tax planning advice
  
  

Professionals stay up to date on tax law and can identify opportunities you might overlook. They also provide peace of mind when navigating complex tax situations.

Take Control of Your Taxes

Tax savings are not just about filing once a year. Strategic planning throughout the year can make a big difference in your refund and overall financial health.

At Sela Tax & Accounting LLC, we help individuals and small businesses maximize deductions and credits while staying compliant with all regulations. Our team offers tax preparation, planning, and year-round support to keep more money in your hands.

Schedule your free 15-minute consultation today and see how much you could save.