We’ve all met someone who brags about how large their refund is every spring. They see it as proof that they’re doing taxes right because they receive such a large refund every year. If I were a betting man, I’d go all in on that they most likely are dramatically overpaying on quarterly taxes or income withholdings, starving cash flow, and giving money away, interest-free to the government.

Refunds aren’t a win or a loss — they’re a balancing act. If you’re overpaying, you’re essentially giving the government an interest-free loan instead of putting that money to work elsewhere. If you’re underpaying, you risk penalties and a hefty April bill. The goal? Aim for a refund (or tax due) that’s small enough to show your cash flow stayed balanced, but not so large it signals you gave up too much liquidity during the year.

This begs the question: how do I, as a business or as an individual, maximize my refund without doing so through increasing quarterly estimates or higher withholdings? 

Business Deductions and Credits to Look Out For

First, let’s look at some of the ways small businesses often leave thousands of dollars on the table. Why? Because they fail to track deductions. I’ve worked with countless self-employed or small business owners who swore they had “no deductions besides “x” item.” However, after reviewing bank statements or suggesting possible expense categories, we uncover a lot of additional deductible expenses. This is to demonstrate that the easiest way to get money back is to take advantage of the expenses you are already incurring, but not deducting on your return. Some common examples include:

• Monthly website or other subscription fees
• Cell phone bill (portion for business use)
• Home office and utilities (portion for business use)
• Business mileage and travel
• Retirement contributions (Solo 401k, SEP-IRA)
• Professional development and continuing education trainings
• Health insurance premiums (self-employed)

The tax credit side for business is very similar. It’s more about taking advantage of what you’re already doing than going out of your way to add something. Credits such as research and development, energy efficiency, and hiring credits can all prove beneficial to business–many of these will be featured in future blogs–so stay tuned.

By just taking advantage of the expenses you are already incurring, there’s potential to save up to 37 cents on the dollar if you are in the top tax bracket. To put this simply, let’s start saving money by making sure we include every expense we incur as a part of doing business. As I continue posting during this tax planning season, we will uncover and go more in-depth on other opportunities for businesses to save money on taxes.

Practical takeaway: Keep a running log of expenses year-round. Waiting until March to remember what you bought in July almost guarantees you’ll forget something.

Individual Deductions and Credits to Take Advantage Of

Even if you’re not running a business, you’re moves may be more limited, but you can make intentional moves that boost your refund. The easiest ways for individuals to lower their taxable income are to contribute to a Traditional IRA and/or a 401(k). These reduce your taxable income in the taxable year, but you will pay taxes on withdrawals in retirement. In a future post, I’ll dig deeper into the tax benefits for traditional versus Roth IRAs and 401(k)s. Another way to reduce taxable income is through a health savings account (HSA); however, your company must sponsor a high-deductible health plan to contribute.

Additionally, numerous credits are available to individuals. Examples include education credits such as the American Opportunity Tax Credit, which grants up to a $2,500 credit for qualified education expenses and the Lifetime Learning Credit, which grants up to a $2,000 credit for qualified education expenses. Similar to the education theme, but not a credit, is the student loan interest deduction. This is worth taking advantage of if you have a student loan. There are also credits for each child you have–hopefully, most parents are aware of this one–however, there’s also a child and dependent care credit, which can be beneficial for families with young children who pay a lot in daycare expenses. Finally, there are some credits for your home. There are credits for energy efficiency home improvements that are set to expire this December, so if there are any projects that you’ve been thinking about doing or should do in the next 1-3 years, now may be the time to do them to take advantage of this credit before it expires.

Practical takeaway: Even late-year moves (December contributions, last-minute donations) can meaningfully boost your refund.

Filing Strategy

Filing early has its perks: faster refunds, less chance of identity theft, and peace of mind. But it’s not always the right move.

When to File Early:

• You’re due a refund
• You have all your documents (W-2s, 1099s, mortgage statements, etc.)
• You want to avoid identity theft risks

When to Wait:

• You’re self-employed or receive K-1s (documents often arrive late)
• You expect amended forms or corrections
• You’re still organizing deductions

Practical takeaway: Don’t confuse speed with accuracy. The IRS would rather get it right than get it fast. Additionally, you’re tax preparer would rather have all the documents needed to file than receive a rejection notice and have to rework your return.

Strategic Moves to Make Before Year End

Maximizing your refund isn’t just about April — it’s about planning throughout the year.

Forward-looking ideas:

• While it may be too late to make a big changes this year, think about adjusting your withholding (W-4 for employees, estimated tax payments for self-employed).
• Automate expense tracking with accounting software.
• Pre-plan retirement contributions.
• Keep receipts and mileage logs digitally.

Think of it as shifting from reactive filing to proactive planning. Not only will your tax preparer be thankful for the steps you took, but your wallet will as well. Refunds don’t magically appear from work that a tax preparer does; they appear from work you do to plan for your larger refund.

Your tax refund is a reflection of your financial planning. For business owners, it’s proof of how well you managed deductions and quarterly payments. For individuals, it’s an opportunity to use tax rules to your advantage.

Don’t leave your refund to chance. Track expenses, contribute strategically, and plan your timing. Every dollar you plan for now is a dollar you don’t have to chase later.

– Brendan Tiedeman, CPA