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5 Practical Ways to Maximize Your Tax Refund for the 2025 Filing Season

Woman on the couch doing taxes

Understanding basic federal tax rules could help you keep more of your hard-earned money. Whether you’re filing your taxes solo or hiring a professional, these five strategies can help you optimize your tax return for the 2024 tax year.

1. Understand Your Filing Status

Your tax filing status determines your tax bracket, standard deduction amount, and eligibility for specific tax credits. Selecting the correct status can save you thousands of dollars, especially if you qualify for multiple options like head of household or qualifying widow(er).

Review significant life changes from the past year, such as marriage, divorce, or becoming a caregiver. For example, a recently widowed parent may benefit more by filing as a qualifying widow(er) instead of single, thereby retaining joint filing rates for up to two additional years.

2. Maximize IRA Contributions

Individual Retirement Accounts (IRAs) provide an excellent way to lower your tax bill while building long-term savings. Contributions to a traditional IRA reduce your taxable income immediately - and with 2024’s higher limits, they offer even greater potential savings. These contributions can also lower your overall tax liability and place you in a lower tax bracket. 

Be sure to deposit funds into your IRA before the tax filing deadline.

3. Take Advantage of Health Savings Accounts 

You may qualify for a Health Savings Account (HSA) if you have a high-deductible health insurance plan. This type of account offers a triple-tax advantage.

  • Tax-free growth
  • Contributions are deductible from taxable income
  • Withdrawals for qualified medical expenses are tax-free

An HSA can be an effective way to reduce healthcare costs while lowering your overall taxable income.

Reminder:

Tax forms are generated for accounts that exceed minimum interest income or capital gains thresholds. Log in to Digital Banking to download your 2024 tax forms. 

4. Consider Itemizing Deductions

Qualified deductions can lower your taxable income, making choosing between itemizing deductions or taking the standard deduction an important decision. Itemizing allows you to claim specific expenses, such as mortgage interest, property taxes, or charitable contributions, which may exceed the standard deduction amount. Compare both options carefully to see which provides greater benefits this year.

For example, a homeowner paying $14,000 in mortgage interest, $6,000 in property taxes, and $5,000 in charitable donations would save more by itemizing since their $25,000 total deductions exceed the standard deduction.

5. Claim Tax Credits You Qualify For

Tax credits reduce your tax bill dollar-for-dollar rather than just lowering taxable income. Each tax credit has specific qualifications and can be worth thousands of dollars in tax savings when properly claimed. Understanding credits like the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) can dramatically reduce your tax liability or increase your refund. 

Review this year’s tax credit requirements and income limits to determine your eligibility. 

The tax filing deadline for the 2024 tax year is April 15, 2025. Use these tips to help keep more money in your pocket this season. For more personalized guidance on maximizing tax savings, visit IRS.gov or consult a tax professional.