Key Tax Benefits to Receive a Bigger Tax Refund

Updated for tax year 2023.

Do you dread income tax time every year? Us too. But there are some things that can make the tax filing process a little easier to swallow—tax refunds, credits, and deductions.

Tax savings opportunities

From advantages for solo tax filers to charitable donations, the tax code offers an array of ways to lower your final tax bill.

When you’re ready to file your federal tax return, watch for these key tax benefits to receive a bigger tax refund:

Family tax savings

• The Child Tax Credit is worth up to $2,000 per eligible child in 2023 and is refundable for taxpayers with an earned income of up to $200,000 (single filers) or $400,000 (joint filers).
• Parents who work or attend school and pay for childcare may qualify for the Child and Dependent Care Credit. The maximum amount of expenses used to calculate the credit is $3,000 per qualifying dependent or $6,000 for two or more qualifying dependents under the age of 13. The maximum credit for 2023 is $1,050 for one child and $2,100 for two or more.
• The Earned Income Credit is for working taxpayers with low to moderate income. The refundable credit amount is based on filing status, the number of qualifying children, and income level. Families with three or more qualifying children could qualify for up to $7,430 in 2023.

College and education tax savings

• Paying off student loans? You may be able to deduct up to $2,500 in interest paid during 2023 depending on your income.
• The American Opportunity Tax Credit (AOTC) is worth up to $2,500 per student for post-secondary tuition, fees, and course materials. You can also claim the Lifetime Learning Credit (LLC) for tuition and related expenses at eligible institutions after the first four years of post-secondary education expenses.
• Contributing to a Coverdell Education Savings Account? You can contribute a maximum of $2,000 per student in annual contributions that will grow tax-free until withdrawn.

Homeowners tax savings

• Homeowners can use the mortgage interest deduction to deduct up to $750,000 on the mortgage interest paid as a single filer or married couple filing jointly, or $375,000 on the mortgage interest paid if you’re married but filing separately.
• The property tax deduction allows a married couple filing jointly to deduct up to $10,000, or $5,000 if single or married filing separately. 
• The home office deduction allows people who operate a business to deduct office expenses. This deduction is an amount based on the percentage of their home used for operating the business.

Employees tax savings

• Grade K-12 educators can deduct $300 in out-of-pocket expenses for classroom supplies.
• You may be able to exempt employer-provided mass transit and parking benefits from your gross income.
• If you itemize and have paid for work-related education, there’s a deduction for your costs paid minus any employer-reimbursed amount.
• Gather all your tax forms (W-2, 1099s, 1098, etc.), receipts, and a copy of last year’s return first. Use a tax preparation checklist to help determine what info you’ll need.

TaxAct has a comprehensive income tax refund guide with extensive information on every step of receiving your refund. 

This article is for informational purposes only and not legal or financial advice.

More to explore:

• What is the Earned Income Tax Credit?
• Is there any benefit to filing my return early?
• The Tax Benefits of Contributing to an IRA
• 7 FAQs about the Earned Income Tax Credit