The annual tax filing period often brings significant stress, with many individuals inadvertently overlooking crucial documents, deductions, or advantageous tax positions that could enhance their refund. According to the Internal Revenue Service, the average tax refund in 2025 stood at $3,167, a figure that certified public accountant Riley Adams notes is not easily increased without careful attention. "Tax season can be frankly stressful, and people frequently neglect to include every applicable tax document, deduction, or tax position," Adams explained. "This oversight can be purely accidental, even among tax professionals."
Avoid Costly Refund Advances
Amid the pressure to file, numerous tax preparation platforms tempt filers with offers for same-day advances on their refunds, typically in exchange for preparation fees and, in some instances, high interest rates. Christopher Jervis, an enrolled agent and president of Lone Wolf Financial Services LLC, advises caution. "The only time I suggest using a refund advance service is when there is an immediate threat of financial hardship," Jervis stated. "Is your electricity about to be disconnected? Is your car about to be repossessed? Then an advance product may be worth it." Otherwise, these advances can be prohibitively expensive, with interest rates ranging from 36 percent to 120 percent, making them a poor choice for those already facing financial difficulties.
Maximising Refunds for Seniors
For seniors aged 65 or older, a new "enhanced deduction for seniors" presents a valuable opportunity to boost refunds. This deduction amounts to $6,000 for single filers and $12,000 for joint filers, and it can be combined with standard or itemised deductions with minimal effort. However, taxpayers should note that this benefit phases out for those with a modified adjusted gross income exceeding $75,000 for singles or $150,000 for joint filers, as highlighted by AARP.
Leveraging Business Deductions
Business owners and sole proprietors seeking to maximise refunds should focus on Schedule C, a form dedicated to business income and expenses. "Businesses often have the most deductions and credits available to them compared to individuals," Adams emphasised. "Schedule C income offers substantial room to deduct relevant business expenses and claim applicable credits to lower your tax bill." A key feature is the qualified business income deduction, which can reach up to 20 percent of a business's net income and applies to sole proprietors, partnerships, and S corporations.
Claiming Dependents for Credits
Dependents, whether children or relatives relying on a taxpayer for care and financial support, can lead to significant tax credits. Filers can claim $2,200 per child and $500 for other dependents, with tax credits being particularly valuable as they directly reduce the amount of tax owed. For example, a $4,400 tax credit could eliminate a $4,400 tax liability entirely. "It's essential to claim your dependents properly if you want to benefit from the child tax credit and the child and dependent care credit," noted accounting firm Brown, Chism & Thompson. Properly claiming dependents for the first time can substantially increase a refund.
New Auto Loan Deduction
A recent tax rule, included in President Donald Trump's One Big Beautiful Bill, allows taxpayers to deduct up to $10,000 in interest paid on auto loans for new cars assembled in the United States. While this deduction may not be as large as others, policy group Bipartisan Policy Center estimates that someone purchasing a new American-made car in 2025 could receive a deduction of a few thousand dollars at most, providing a modest boost to refunds.
In summary, experts stress the importance of thoroughness and awareness during tax season to avoid costly mistakes and capitalise on available benefits. By steering clear of expensive refund advances, utilising senior deductions, leveraging business expenses, claiming dependents correctly, and considering new deductions like those for auto loans, taxpayers can work towards securing a more substantial refund. As Adams concluded, "Double-checking details and seeking professional advice when needed can make a significant difference in your financial outcome."
