Paycheck Maintenance: 5 Moves To Make After You File Your Taxes To Make Next Year Better
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Jennifer Taylor
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Rebekah Evans
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Tax Day is almost here. Whether you’ve already filed or are waiting until closer to the April 15 deadline, owing as little as possible — or hopefully getting a refund — is likely your goal.
If that didn’t transpire this year, now is the time to start working toward achieving this objective in the 2025 tax filing season. There’s several different moves you can make that together can help decrease the amount you’ll owe Uncle Sam.
As of March 29, 2024, the average refund amount is $3,050, according to the IRS. While more individuals have e-filed self-prepared returns than those prepared by tax professionals — 41.1 million compared with 46.3 million — a notable amount have been expertly prepared.
If you’re not satisfied with your return, it might be worth seeking the services of a tax professional. Since they’re subject matter experts, they’re aware of tips, credits and deductions that might not be on your radar, allowing you to keep as much of your money as possible.
After submitting your 2024 return, taxes might be the last thing you want to think about. However, promptly making a tax plan will allow you to maximize your savings.
GOBankingRates spoke with several tax experts to get you started. Here are five moves to make as soon as you file your tax return this year, to improve your tax situation for next year.
Increase Pre-Tax Retirement Contributions
“If you found yourself paying more taxes than you’d like this tax season, consider starting — or increasing — your retirement contributions on a pre-tax basis,” said Daniel Masuda Lehrman, certified financial planner (CFP), certified student loan professional (CSLP) and owner of Masuda Lehrman Wealth LLC.
He said this is most commonly done by contributing to an employer-sponsored 401(k).
“By contributing to a 401(k), you are effectively reducing your taxable income by contributing portions of your pay into a retirement account on a pre-tax basis,” he said. “Not only will this money hopefully grow and fund your retirement one day, but it will help reduce your tax bill next April.”
Utilize a Health Savings Account
“Leveraging health savings accounts (HSAs) has proven to be a pivotal move for employees looking to improve their tax standing,” said Philip Wentworth, Jr., co-founder of Rockerbox Tax Solutions. “For those with high-deductible health plans, contributing to an HSA is a triple win — the contributions are tax-deductible, the account growth is tax-free and withdrawals for qualified medical expenses are also tax-free.”
In addition to reducing your taxable income, he said this strategy also sets a safety net for healthcare expenses.
“From my experience, advising clients on maximizing their HSA contributions has consistently yielded significant tax savings and improved financial resilience,” he said.
Adjust Tax Withholdings
“Many workers either overestimate their tax liability, leading to a large refund that acts as an interest-free loan to the government, or underestimate, resulting in a tax bill,” Wentworth said. “By carefully projecting their yearly tax liability and adjusting withholdings accordingly, we’ve helped clients better manage their cash flow throughout the year.”
Getting your tax withholdings right can hugely impact your financial situation.
“This strategic adjustment enables more accurate budgeting and prevents any unwelcome surprises come tax season,” he said. “Through these and other tailored strategies, our aim is always to enhance our clients’ financial well-being and tax efficiency.”
Claim Tax Credits
The IRS offers a wide variety of tax credits to help lower your tax bill — so James Strong, an accountant and financial enhancement specialist, said it’s important to take advantage of them.
“Making the most of tax credits is a straightforward way to decrease your tax liability and keep more money in your pocket,” he said. “Whether it’s the Earned Income Tax Credit for working individuals, the Child Tax Credit for parents or education credits for students, exploring these options can significantly impact your overall tax situation.”
Some other tax credits that might help you save money include saving for retirement, investing in clean vehicles or clean home energy, buying health insurance in the marketplace and other personal tax credits — i.e., paying taxes overseas.
Record Deductible Expenses
Throughout the year, you might be spending money on expenses you can use to lower your tax bill, so it’s important to be informed.
“Donations to charity, medical expenses and business costs are often deductible, which means they can lower your tax bill,” Strong said. “Keeping a record of these deductible expenses throughout the year ensures you maximize [deductible expenses] during tax time.”
Some other deductible expenses include alimony payments, money you put in an IRA, penalties on early withdrawals from savings, student loan interest and teacher expenses.
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