9 Tips to Reduce Your Tax Bill or Boost Your Refund Before the Deadline 💰✨

As the April 15th personal tax deadline approaches, many taxpayers may find themselves scrambling to reduce their tax liability or even maximize their refunds.

Here are some practical ways to do just that before the deadline

1. Choose the Right Filing Status

Your filing status directly impacts your tax rate, deductions, and overall tax bill. The five main filing statuses are:

• Single

• Married Filing Jointly

• Married Filing Separately

• Head of Household

• Qualifying Widow(er)

  
  

📌 Learn more: IRS: Filing Status Options

Selecting the correct filing status is crucial. For example, Head of Household (HOH) offers a higher standard deduction than Single and could result in a lower tax bill.

Additionally, if you are caretaking for a grandchild, for example, that is now living with you, you may be eligible to claim HOH filing status as well as potentially the Child Tax credit (if the qualifying person is under 17 years of age for the tax credit). If you are eligible, make sure you have the custodial parent release the dependency election to you with Form 8332, and you will include with your federal tax return.

Meanwhile, Married Filing Separately can limit deductions and credits, so weigh your options carefully.

2. Take Advantage of Tax Deductions

Deductions reduce your taxable income, potentially lowering your tax bill. You can take the standard deduction or itemize deductions, depending on which option benefits you most.

For the 2024 tax year, standard deduction amounts are:

• Single: $14,600

• Married Filing Jointly: $29,200

• Head of Household: $21,900

If your itemized deductions—such as mortgage interest, medical expenses, and state taxes—exceed the standard deduction, itemizing may be the better choice, so run the numbers both ways. Also, we aware that itemizing may make sense on your state tax return even if it didn’t make sense on your Federal Tax return, due to the increased standard deductions on the federal returns as a result of the 2017 Tax Cuts and Jobs Act.

📌 Read more: Should You Itemize or Take the Standard Deduction?

3. Consider using Donor-Advised Funds (DAFs) for Charitable Giving

If you need a tax deduction and giving is in line with your values, a Donor-Advised Fund (DAF) can help while supporting your favorite causes.

A DAF allows you to:

✅ Make a large, tax-deductible donation in one year, even if you plan to distribute the funds to charities over time.

✅ Bunch charitable contributions into one tax year to exceed the standard deduction and benefit from itemizing.

✅ Donate appreciated assets (such as stocks) instead of cash, avoiding capital gains taxes while receiving a charitable deduction.

If you’re on the edge of deciding between the standard deduction and itemizing, using a DAF could push you over the threshold to claim a larger deduction, so work the numbers both ways before making a decision.

📌 Explore: Fidelity Charitable: How Donor-Advised Funds Work

4. Contribute to Retirement Accounts to Reduce Taxable Income

Maximizing retirement contributions before the tax deadline is one of the most effective ways to lower your taxable income, and many folks are not taking advantage of this.

Contributions to the following accounts may be tax-deductible if you are eligible*:

• Traditional IRA: Contribute up to $7,000 in 2024 (or $8,000 if you’re 50 or older) before the tax deadline, reducing your taxable income*.

• 401(k): Contributions are made pre-tax, lowering your taxable income while growing tax-deferred. The 2024 limit is $23,000 (or $30,500 if you're 50 or older).

  
  

✅ Spousal IRA Contributions: If your spouse isn’t working, you can still contribute to an IRA on their behalf. A spousal IRA allows a working spouse to contribute up to $7,000 (or $8,000 for those 50+) into an IRA for a non-working spouse. This strategy provides additional tax-deferred savings and reduces taxable income for the high-net-worth household.

📌 More details: Spousal IRAs Explained

5. Claim Valuable Tax Credits

• Earned Income Tax Credit (EITC): A credit of up to $7,830 for low-to-moderate-income taxpayers. Eligibility depends on income, filing status, and the number of qualifying children.

• Child Tax Credit: Up to $2,000 per qualifying child, with up to $1,700 refundable for 2024. The credit begins to phase out at $200,000 for single filers and $400,000 for joint filers.

• Saver’s Credit: If you contribute to a retirement account and meet income limits, you could receive a tax credit up to $1,000 for individuals or $2,000 for married couples filing jointly.

  
  

📌 Check eligibility: IRS: Earned Income Tax Credit

6. Reduce your potential Alternative Minimum Tax (AMT) when exercising stock options with a Roth IRA Conversion

Incentive stock options are not subject to ordinary income tax on exercise, however, the spread between the strike price and fair market value of the stock at exercise is subject to the alternative minimum tax (AMT) on exercise. Because of the differences in tax rates, a Roth conversion can actually help reduce potential or avoid AMT.

7. Avoid Common Tax Mistakes

Filing errors can delay refunds or trigger IRS scrutiny.

Be sure to:

✅ Choose the right filing status

✅ Check for misspelled names or incorrect Social Security numbers

✅ Report all sources of income (including freelance work and investments)

✅ Double-check math calculations

Filing electronically and opting for direct deposit can also speed up your refund.

📌 Read: Common Tax Filing Mistakes

8. File Electronically and Opt for Direct Deposit

Filing electronically and choosing direct deposit can expedite your refund. The IRS reports that electronic filers who opt for direct deposit often receive their refunds within 21 days. This method also reduces the risk of lost or stolen checks.

9. Stay Updated on Tax Law Changes

Each year, tax laws change, impacting deductions, credits, and filing procedures.

For 2024, updates include:

• Adjusted tax brackets due to inflation

• Higher standard deductions

• New phase-out limits for certain credits

Understanding these changes ensures you maximize deductions and credits while staying compliant with tax laws.

📌 Stay informed: IRS: Tax Law Changes for 2024

Final Thoughts

With tax season in full swing, now is the time to take advantage of every available deduction and credit. Strategic planning—such as contributing to retirement accounts, using donor-advised funds, and optimizing your filing status—can help reduce your tax burden and increase your refund.

If you’re unsure about the best approach, speak with your financial planner and consider consulting a certified tax professional to ensure you’re making the most of available tax-saving opportunities. Financial Planners may be found at the CFP ® Board Find a CFP ® professional website,  this IRS site has Federal Tax return preparers or check out the National Associate of Enrolled Agents to find a professional.

📌 Reminder: The tax deadline is approaching fast! Don't wait until the last minute to implement these strategies.

Note: Tax laws and regulations are subject to change. Always consult the latest IRS guidelines or a tax professional for the most current information.

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