How to Get the Biggest Tax Refund in 2023

Select the Right Filing Status

Your filing status determines your standard deduction amount as well the income thresholds used for some credits and deductions. The status you use could significantly alter your refund. For instance, a person is allowed to file as a qualifying widow(er) for the two years after their spouse’s death. This status nearly doubles the standard deduction someone would receive if they filed as single.

Married couples can also choose between filing jointly or separately. “Ninety-nine times out of 100, if you are a married couple, you’re better off filing jointly,” says Riley Adams, a certified public accountant and owner of the website Young and the Invested.

Only in rare instances will filing separately save a married couple money. For example, if one spouse has high medical expenses that they would like to itemize, the couple’s combined income might make itemization impossible, Adams says.

Don’t Overlook Dependent Care Expenses

If you claim children on your tax return, you receive a $2,000 child tax credit for each one younger than age 17. But don’t miss out on the chance to receive an additional tax credit for your day care costs.

Depending on your income, you may be able to receive a credit worth up to 35% of $3,000 spent on qualifying care for one child, or $6,000 spent on qualifying care for two or more children. Qualifying expenses can include day care, before- and after-school programs, summer day camps and sports camps (although not overnight camps). To qualify, the care needs to be provided so you can work.

While most people claim this credit for children age 12 and younger, it is also possible to claim it for older disabled children or even an elderly parent.

Itemize Deductions When Possible

The Tax Cuts and Jobs Act of 2017 significantly increased standard deductions to the point where most people no longer itemize. However, if you have significant charitable contributions or medical expenses, it’s worth investigating whether you could save money by itemizing your deductions.

If itemizing this year doesn’t make sense, consider whether there is a way to change your spending to be able to itemize in a future year. Bunching several years’ worth of charitable contributions into a single year may be the most common way to do that.

“The donor-advised fund takes care of that,” says Chris McMahon, president and CEO of Aquinas Wealth Advisors in Pittsburgh. By creating a donor-advised fund, people can make a large initial deposit for charitable giving. That deposit can be itemized on tax returns, but then the funds can be distributed to charities over a period of years.

Contribute to a Traditional IRA

Retirement funds are a prime way to save money on taxes. “Some of the best ways people can maximize their refund is to contribute to pre-tax accounts,” Chavis says.

While it is too late to contribute to your workplace 401(k) to save on this spring’s tax return, you can still fund an IRA up to the tax filing deadline, which is April 18 in 2023. If you are younger than 50, you can contribute up to $6,000 to an IRA for the 2022 tax year. The limit is $7,000 for those age 50 and older.

Be sure you are contributing to a traditional IRA, though, and not a Roth IRA. Contributions to Roth accounts are not tax deductible, although these IRAs have their own set of tax benefits.

Also, if you have a workplace retirement plan, such as a 401(k), the ability to deduct IRA contributions begins to phase out for single and head of household filers once their modified adjusted gross income reaches $68,000. For married couples filing jointly and qualifying widow(er)s who have workplace plans, the full IRA contribution deduction is only available to those earning $109,000 or less.

Max Out Contributions to a Health Savings Account

If you have a qualifying high deductible health insurance plan, you can save on your taxes by contributing to a health savings account. These accounts allow people to put aside money for medical expenses, and they come with triple tax savings. Contributions are deductible, money in the account grows tax-free and withdrawals are tax-exempt when used for qualifying expenses.

As with a traditional IRA, deductible contributions to an HSA can be made through the tax filing deadline.

For the 2022 tax year, those with a qualified family health insurance plan can deduct HSA contributions of up to $7,300, while taxpayers with individual plans can deduct up to $3,650. With either type of insurance, those who are age 55 or older are entitled to make an additional $1,000 in deductible contributions.

Claim a Credit for Energy-Efficient Home Improvements

Thanks to the Inflation Reduction Act of 2022, you may be entitled to a tax break for improvements that increased your home’s energy efficiency.

“It took credits that had expired in 2021 and extended them to 2022,” Adams says. That means those who made energy-efficient upgrades such as new windows, exterior doors or added insulation can claim a credit of up to $500 on this spring’s tax return.

The new law also expanded those credits into 2023 and beyond and increased their value. If you plan to claim a credit for energy-efficient home improvements, Adams advises keeping all documentation from each purchase in case the IRS needs to verify its eligibility. “The IRS doesn’t have to audit you,” he says. “They could contact you to ask for clarification.”

Consult With a New Accountant

If you’ve been using the same tax professional for years, it might be time to have a fresh set of eyes look over your return. After many years, a tax accountant might be used to completing a client’s return a certain way and not be proactively looking for savings.

A new accountant may provide a more robust review of a person’s tax situation and, in some cases, be able to amend past returns to garner larger refunds from previous years. “We’ve seen clients pick up a couple thousand bucks,” McMahon says of those who came to his firm for a fresh look at their returns.

Whether you use an accountant or prepare your own tax return, remember that the tax code is always changing and your opportunities for savings may change yearly as well.