Tips to get a bigger tax refund in 2024

Getting a hefty tax refund at the start of the year feels great, so why not make sure it’s as hefty as possible?

Depending on the filing status you choose to the dependents, deductions, and credits you claim, the exact amount of federal and state taxes you owe—and thus the refund you get, if any—can vary quite a bit.

To understand the impact these choices make and how you can help make sure you’re getting the maximum refund you’re entitled to, AAA spoke with tax expert Casey Schulte, Manager of Tax Development at TaxAct and an enrolled agent with more than 10 years of tax experience. 

What does it mean to get a bigger tax refund, anyway?

Your tax return determines how much tax you actually owed for the previous year and compares it to the taxes you sent the IRS—essentially, you calculate your tax paid minus your tax owed. If you paid more than you owed (as most taxpayers do), you’re entitled to a refund of the excess.

When people talk about getting a bigger refund, they’re usually referring to the second part of the calculation above: reducing the amount of tax owed. The less you owe, the more you get to keep, regardless of the specifics of your withholding during the tax year.  

A large refund can also result from the first part of the equation, if you’ve paid far more tax than you owed. “Getting a large refund is great, but it could mean that you paid too much throughout the year and you're being refunded with excess withholding or payments you made," Casey says. “Having a good tax plan can help ensure you’re only paying the appropriate amounts throughout the year and maximizing the amount of money in your pocket.” 

1. Pick the right filing status

The first thing you’ll do on your tax return is choose a filing status. “Fortunately, it’s a pretty easy one for the majority of people,” Casey says, since it’s based on marital status and whether you have dependents.

If you’re married, the question is whether to file as “married filing jointly” with 1 combined tax return, or as “married filing separately” with each spouse filing their own return. For most married couples, filing jointly is both easier and produces a bigger tax refund.

Depending on your circumstances, though, it may be worth it to file separately. For example, Casey points out you can deduct many unreimbursed medical expenses on your taxes if they exceed 7.5% of your adjusted gross income (AGI). Filing separately can lower the AGI of the person who incurred the medical expenses and allow them to deduct more of their medical expenses.

He also cites couples with income-based student loan repayments as potential beneficiaries of filing separately as it can reduce their monthly loan payments.

If you’re unmarried, your options for filing are “single” and “head of household.” To qualify as a head of household, you must be unmarried (never married, divorced, or living separately from your spouse for at least the last 6 months of the tax year), pay more than half the costs of your housing, and have at least 1 qualifying dependent living with you.

Heads of households get lower tax rates and a larger standard deduction, so filers should check whether they qualify. 

2. Make sure you claim any qualifying dependents

Dependents are often children, but Casey says they don’t have to be:

• Relatives may also be eligible dependents if you’re providing more than half their financial support and they have an income below a threshold.
• Non-relatives might be dependents if they fulfill those criteria and also live in your household year-round. (Dependents must meet additional criteria, such as not already being claimed as dependents on someone else’s tax return.)

Claiming dependents helps lower your taxes in a few ways. As noted previously, if you’re unmarried, it may allow you to file as a head of household, which comes with a more generous tax bracket and bigger standard deduction.

Regardless of your filing status, claiming dependents also makes you eligible for dependent tax credits: $2,000 via the Child Tax Credit for each dependent child, or $500 via the Credit for Other Dependents, according to Casey. If you pay for child or dependent care so you can work, you may also be eligible for the Child and Dependent Care Credit. 

3. Know all credits & deductions you may qualify for

Speaking of tax credits, they’re one of the things filers most often have questions about, along with tax deductions: As Casey puts it, “How does a taxpayer know that they're claiming everything that they're eligible for?”

4. Know whether the standard deduction or itemized deductions are better for you

The standard deduction is a set amount based on filing status. For example, the single-filer standard deduction for the 2023 tax year is $13,850.

If you choose to itemize your deductions, you’ll instead fill out Schedule A of your tax return to deduct things like state and local taxes, home mortgage interest, and donations to charity. Schedule A deductions are only available when you choose to itemize.

To get the biggest refund, Casey says, “typically you'll want itemize when your deductions on Schedule A exceed the amount of your standard deduction.” Otherwise, you’re better off simply taking the standard deduction—as most taxpayers do.

Casey points out an exception, though: In some states, filers who want to itemize deductions on their state tax return must do so on their federal return too. “If the benefit of itemizing on your state return outweighs the cost of a little bit less deduction on the federal return, you might want to itemize even though your standard deduction is higher on the federal return.”

This is another area where tax prep software like TaxAct can help by comparing the return you’ll get both ways to see which one is bigger. “Always enter your itemized deductions just in case,” Casey says, “and flip back and forth to see how it impacts your returns.”

AAA and affiliated AAA clubs do not provide tax, legal, or accounting advice. The above article is for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.