5 moves to make now to maximize your tax refund

Happy young couple sitting on the floor reviewing steps they can take to maximize their tax refund.Image: Happy young couple sitting on the floor reviewing steps they can take to maximize their tax refund.

In a Nutshell

Tax Day is approaching, but you still have time to maximize your tax refund if you’re getting one. These tips can help you get as much money back as you’re entitled to for 2018, plus put you on track to save more on your 2019 taxes.
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This article was fact-checked by our editors and Christina Taylor, MBA, senior manager of tax operations for Credit Karma. It has been updated for the 2019 tax year.

Filing your income taxes will probably never be fun, but it does have a silver lining — the possibility of getting a tax refund.

As Tax Day gets close, you may feel some anxiety. You might even be considering rushing through the tax filing process just to get it done.

But take a breath. Gather your thoughts and your paperwork. You have plenty of time to take steps to maximize your refund for 2018.


  1. Add to your retirement accounts
  2. Save for your health
  3. Continue the spirit of giving
  4. Use a free tax preparation service
  5. Start planning to maximize your refund for next year

1. Add to your retirement accounts

Contributions to employer-sponsored 401(k)s and traditional IRAs reduce your taxable income, which in turn can lower your tax burden and help maximize your refund.

You have until December 31 deadline to make the maximum allowable contributions to your employer-sponsored 401(k) for 2018. For 2018, the IRS raised the limits on employees’ 401(k) contributions to $18,500, or $24,500 if you’re 50 or older and making “catch-up” contributions.

With a traditional IRA, you still have time to maximize your tax benefit for 2018. You can count contributions you make up to April 15, 2019, toward the 2018 tax year. So if you don’t have the cash now, you may still have some time to make it work. Be sure to label the contributions as being for the 2018 tax year, rather than for 2019.

Just make sure to check the IRS website to see if any deduction limitations apply to your traditional IRA contributions. Sometimes there are limits on how much you can deduct based on your income and whether you have a retirement plan through work.

“Make sure that you don’t need the money in your day-to-day affairs,” says John Reddall, a certified public accountant and enrolled agent. “If you have to take it out before you hit retirement age you may be penalized.”

Also, note that this trick won’t work if you have a Roth 401(k) or Roth IRA because contributions made to these accounts aren’t tax-deductible.

2. Save for your health

If you have a health savings account, you have until April 15, 2019, to make contributions that can count for 2018 and help maximize your refund.

As with some retirement accounts, contributions to a health savings account, also known as HSAs, are also tax-deductible. That’s not the only tax break you’ll get, either. Whatever interest or earnings you get with an HSA — and even distributions from the account — are tax-free if you use them for qualified medical expenses.

The only caveat is that not just anyone qualifies for an HSA. You must meet the following requirements:

  • Have a high-deductible health plan
  • Have no other health coverage other than the HDHP, with some exceptions
  • You cannot be enrolled in Medicare
  • No one else claims you as a dependent on their tax return

If you qualify for an HSA in 2018, you can contribute up to $3,450 if you have an individual HDHP, or up to $6,900 if you have a family HDHP.

3. Continue the spirit of giving

The end-of-year holidays are supposed to be the season of giving, so it’s probably no surprise that about a third of all charitable contributions are made in December.

To count for your 2018 taxes, your donation must be made by Dec. 31, 2018. Making a charitable contribution is a great idea to give back while possibly reducing your tax burden.

You can deduct up to 60% of your adjusted gross income in charitable contributions in most cases.

If you don’t have a lot of extra cash, consider cleaning out your closet or rummaging through your storage to find things to donate. As long as they’re in good condition, you can deduct these in-kind donations at their fair market value. Donating items you no longer need is a great way to repurpose them, do some good, and qualify for a deduction that could help maximize your refund.

Just make sure that it’s a qualified organization before you donate. Otherwise, you might not be eligible to deduct the contribution.

4. Use a free tax preparation service

No one expects you to be an expert on how to file taxes. Plus, you probably don’t want to comb through the thousands of pages that make up the tax code to make sure you understand every angle.

Free tax online tax preparation services can walk you through the tax return process, helping you identify which deductions you may be eligible for by asking questions about your life and financial situation.

5. Start planning to maximize your refund for next year

Even if you miss some opportunities to maximize your tax refund for the 2018 tax year, you can always plan ahead for next year. Redall recommends you avoid making taxes a “last-minute conversation.”

So, for 2019, start thinking about ways you can maximize your tax refund from the start. Instead of making a big contribution to your 401(k) or IRA account in December, up your monthly contribution instead. The same goes for HSA contributions and charitable donations.

Also, make sure to keep track of things like charitable donations, so you don’t have to scramble at the end of the year to find out how much you’ve donated over the year. The more prepared you are, the easier it will be at tax time.


Bottom line

You still have time to do a few more things that could maximize your tax refund for the 2018 tax year. And you have plenty of time to get started working on 2019.

While you’re thinking of ways that work for you, remember not to spend money just for the tax break.

“If you have transactions that are necessary or desirable then, by all means, make them,” says Reddall. “And, if they happen to benefit you from a tax standpoint, then all the better.”

You don’t want to blow your budget and leave yourself in a short-term financial bind just to get a bigger refund.

As you figure out what works best for you within your budget, you can go back to daydreaming about what you’re going to do with your tax refund, knowing that it’s as much as it should be.


Christina Taylor is senior manager of tax operations for Credit Karma. She has more than a dozen years of experience in tax, accounting and business operations. Christina founded her own accounting consultancy and managed it for more than six years. She co-developed an online DIY tax-preparation product, serving as chief operating officer for seven years. She is the current treasurer of the National Association of Computerized Tax Processors and holds a bachelor’s in business administration/accounting from Baker College and an MBA from Meredith College. You can find her on LinkedIn.


About the author: Ben Luthi is a personal finance freelance writer and credit cards expert. He holds a bachelor’s degree in business management and finance from Brigham Young University. In addition to Credit Karma, you can find his wo… Read more.