What actually determines your refund size

Your refund is not something the IRS decides to give you. It is the difference between the total tax you paid during the year and the total tax you actually owe. If you paid $5,000 and owe $3,000, you get $2,000 back. To get a bigger refund, you either need to have paid more tax during the year, or you need to owe less tax — or both.

Most people cannot retroactively change what they paid in 2024 if they are filing in 2025. But you can reduce what you owe by claiming deductions and credits you may have missed. You can also change your withholding for future years so more money stays in your paycheck instead of going to the IRS, then comes back as a refund later.

The most common reason people get small refunds is that they are not claiming deductions or credits they are may have access to to. The second most common reason is that their employer is withholding too little tax from each paycheck, so they end up owing money instead of getting a refund.

Key Takeaways

  • A bigger refund comes from either paying more tax during the year or owing less tax when you file — usually the second one is in your control.
  • Deductions reduce the income you are taxed on; credits reduce the tax itself dollar-for-dollar, so credits are worth more.
  • Common missed deductions include student loan interest, educator expenses, and charitable donations; common missed credits include the Earned Income Tax Credit and child-related credits.
  • If you get a small refund or owe money every year, your withholding is probably wrong, and you can fix it by submitting a new Form W-4 to your employer.
  • Increasing retirement contributions to a 401(k) or traditional IRA reduces your taxable income and can increase your refund.

Claim deductions you are overlooking

A deduction reduces the amount of income the IRS taxes you on. If you earn $60,000 and claim $10,000 in deductions, you only pay tax on $50,000. The bigger your deductions, the smaller your tax bill, and the bigger your refund (if you have already paid enough tax during the year).

The most commonly missed deductions are: student loan interest (up to $2,500 per year if you paid it), educator expenses if you are a teacher (up to $300), charitable donations if you itemize, and unreimbursed work expenses in certain fields. If you are self-employed, you can deduct home office space, vehicle mileage, supplies, and equipment. If you own rental property, you can deduct mortgage interest, property tax, repairs, and utilities.

You have two choices: take the standard deduction (a flat amount set by the IRS each year) or itemize (list out your individual deductions). You should itemize only if your individual deductions add up to more than the standard deduction. For 2024, the standard deduction is $14,600 for single filers and $29,200 for married filing jointly, but these amounts change yearly.

To find deductions you may have missed, look through your records for receipts, donation confirmations, and statements from student loan servicers or mortgage lenders. If you are self-employed, gather records of business expenses. If you are unsure whether something counts, the IRS website has a searchable publication library, or you can consult a tax professional.

Use tax credits to reduce what you owe

A tax credit is worth more than a deduction because it reduces your tax bill dollar-for-dollar instead of just reducing your income. A $1,000 credit saves you $1,000 in tax. A $1,000 deduction saves you tax only on that $1,000 of income (so $100 to $370 depending on your tax bracket).

The most commonly missed credits are the Earned Income Tax Credit (EITC), which goes to lower-income workers; the Child Tax Credit, which is $2,000 per child under 17; and the Child and Dependent Care Credit, which covers daycare or after-school care expenses. If you paid for higher education, the American Opportunity Tax Credit (up to $2,500) or Lifetime Learning Credit (up to $2,000) may explore. If you installed solar panels or made energy-efficient home improvements, the Residential Energy Credits may reduce your bill.

Some credits are refundable, meaning if the credit is larger than your tax bill, the IRS sends you the difference. The EITC and the refundable portion of the Child Tax Credit are refundable. Other credits are non-refundable, meaning they can only reduce your tax to zero but cannot create a refund. You need to know which is which because a refundable credit can increase your refund even if you owe no tax.

To claim a credit, you usually enter it on your tax return form (often Schedule 3 or directly on Form 1040). The IRS website lists all credits with income limits and requirements. If you have children, double-check that you have claimed the Child Tax Credit and any dependent care credits. If you are low-income, run the EITC pre-screening tool on IRS.gov to see if you may have access to.

Increase retirement contributions to lower your taxable income

Contributing to a traditional IRA or a 401(k) plan reduces your taxable income for the year. If you contribute $7,000 to a traditional IRA, you reduce your taxable income by $7,000, which lowers your tax bill and increases your refund (assuming you have already paid enough tax during the year).

For 2024, you can contribute up to $7,000 to a traditional IRA (or $8,000 if you are 50 or older). If your employer offers a 401(k), you can contribute up to $23,500 (or $31,000 if you are 50 or older). These limits change yearly. The contribution must be made by the tax filing important date (usually April 15) to count for that tax year.

This strategy works best if you have earned income and have not yet maxed out your retirement account. It is also useful if you had a high-income year and want to reduce your tax bill. However, you cannot withdraw the money without penalties until you reach age 59½, so only use this strategy if you can afford to lock the money away.

If you are self-employed, you have additional options: a Solo 401(k) or a SEP IRA allow much higher contributions. A tax professional can help you figure out which account makes sense for your situation.

Fix your withholding if you consistently get small refunds or owe money

Your employer withholds tax from each paycheck based on information you provide on Form W-4. If your withholding is too low, you will owe money when you file. If it is too high, you will get a refund. Many people think a big refund is good, but it actually means you gave the IRS an interest-free loan all year.

The ideal outcome is to break even or get a small refund — that means you withheld about the right amount. If you consistently owe money or get a refund larger than $1,000, your withholding is off, and you should fix it.

To adjust your withholding, fill out a new Form W-4 and give it to your employer's payroll department. The form has a worksheet to help you calculate the right amount. You can also use the IRS Withholding Calculator on IRS.gov, which asks about your income, deductions, and credits and tells you what to enter on the form. If you have a complex situation (multiple jobs, side income, or significant deductions), a tax professional can help you get it right.

Changing your withholding does not affect your current-year refund — it only changes how much tax comes out of your paychecks going forward. So if you are filing for 2024 and realize your withholding was wrong, you can adjust it for 2025 and beyond.

Understand the timing of when you file

Filing earlier in the tax season does not increase your refund, but it does mean you receive it sooner. The IRS begins accepting returns in late January each year. If you file in February, you may receive your refund within two to three weeks. If you file in April, you may wait longer because the IRS is processing millions of returns.

However, if you are expecting a refund and you have not received it after 21 days, you can check the status using the "Where's My Refund?" tool on IRS.gov. You will need your Social Security number, filing status, and the exact refund amount.

One timing note: if you are owed a refund and you also owe money to a federal agency (like a student loan servicer or the Department of Education), the IRS may offset your refund to pay that debt. This is called a tax offset. If you think this might happen to you, contact the agency that holds the debt to see if you can arrange a payment plan instead.

Frequently Asked Questions

Can I get a bigger refund by claiming dependents I do not have?

No. Claiming a dependent you are not may have access to to is tax fraud. The IRS matches dependent claims against Social Security numbers and will catch mismatches. Penalties include owing back taxes, interest, and a 75% accuracy-related penalty.

Does filing electronically get me a bigger refund than filing by mail?

No. The refund amount is the same either way. However, electronic filing is faster and more accurate because the IRS processes it automatically. If you file by mail, processing takes much longer, and errors are more likely.

What if I owe taxes instead of getting a refund?

You can set up a payment plan with the IRS. If you cannot pay in full by the important date, you can request an installment agreement (monthly payments) or an offer in compromise (settling for less than you owe, though this is rare). Visit IRS.gov or call 1-800-829-1040 to explore your options.

Can I claim the same deduction twice on different forms?

No. If you claim a deduction on your main return, you cannot claim it again on a schedule or form. The IRS will catch duplicates and disallow one of them. Keep records of what you claimed so you do not accidentally double-count.

Does getting married or divorced change my refund?

Yes. Your filing status changes, which changes your standard deduction, tax brackets, and which credits you can claim. If you married or divorced in 2024, you file as married or single for that entire year, even if the change happened on December 31. A tax professional can help you figure out the best filing status if your situation is complex.