3 Ways to Get a Bigger Tax Refund This Year

3 Ways to Get a Bigger Tax Refund This Year
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No one I know likes to pay taxes. Though when you have to pay taxes, it does indicate you’re making money. So there’s a silver lining in that!

As a law abiding US citizen, I pay my taxes each year. But it doesn’t mean I enjoy it. So I also make an effort to see where I can increase my tax refund (and lower my taxable income).

If financial independence retire early (FIRE) is your goal, then consider the following simple ways to get a bigger tax refund this year.

Related Content:

Early Retirement: Top 5 Tips to Make it Happen ASAP

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5 Simple Ways I Increased My Tax Refund

Max my contribution to my employer's retirement plan.

Does your employer offer a retirement plan like a 401K, 403B or SIMPLE IRA? Do they offer a company match?

In Corporate America, I used to max my 401K contributions each year. If your company offers a match, try to contribute as much as possible to at least get the full match.

If you are a small business owner, you may consider contributing to a SEP IRA, solo 401k or a SIMPLE IRA.

All of these plans are great options for lowering your taxable income while saving for your (and your employees’) futures.

Select a SEP IRA if you are a small business owner who wishes to make a tax deductible contribution into an IRA for yourself and on behalf of your employees.

Select a SIMPLE IRA if you are a business owner with a workplace of 100 or less employees and will fund the bulk of their retirement. Choose a solo 401K if it’s just you.

Max my contribution to a health savings account (HSA).

When maximized, a Health Savings Account (HSA) has three tax advantages. HSA contributions are pre-tax/tax-deductible. The money grows tax-free and the money can come out tax free.

Overall, contributing to your HSA is a great way to save for medical expenses and reduce your taxable income.

How do you get an account? It’s common for health insurance providers to offer HSAs. If yours doesn’t have one, you can open a separate HSA account at most financial institutions.

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I like to max out my HSA each year. If you’ve ever experienced medical bills, you know how important it is to have an emergency fund dedicated solely to medical expenses.

If you have a high-deductible medical plan, you may have the option to contribute to an HSA. The unused contributions can roll over indefinitely and grow tax-free.

Many seeking early retirement like to use their HSA as an additional retirement account. If you don’t want to touch your HSA contributions, then you can pay for your medical bills out of pocket.

Your HSA would then be able to compound tax-free over time. When you turn 65 or are disabled, the IRS allows you to withdraw the HSA money penalty-free.

Work with my CPA to get the biggest tax refund possible.

No matter how talented, driven, or passionate you are, your financial success is heavily impacted by your support team.

The person that cares most about your finances is you. Making sure you have a solid support team to help you achieve FIRE is critical.

Sure, it's not easy finding people you can trust when it comes to your personal finances. It took me many hours to vet CPAs and other financial experts. But it was worth it!

When April approaches each year, I sleep easily knowing that my CPA Amy Northard has ensured I received the biggest tax refund possible.

Interested in working with Amy too? Schedule a free chat with her here!

The money I save having Amy file my taxes more than covers the cost of her (very reasonable) service fee.

Get Amy's latest tax and bookkeeping tips or get in touch with Amy herself here!