The idea of making money sounds exciting. But the excitement drains down when it comes to filing Income Tax Returns (ITR). You’re not the only one who thinks filing ITRs is tedious.  We’ve been there. The refund never really seems to satisfy us, at least most of the time.

Now, it’s time to change this once and for all. Here are 7 brilliant ways to maximize the tax refund.

1. Claim The Best Status Possible

Although the majority of married couples file jointly each year, it is not always the most beneficial option. Filing separately often requires more effort, but under the right conditions, it can result in better tax savings. Filing separate returns has its drawbacks too, such as losing certain deductions available to joint filers. Hence, this needs to be weighed carefully to maximize the refund potential.

2. Choose Itemizing Over Standard Deductions

About 90% of taxpayers claim the standard deduction instead of itemizing their tax deductions. Investing a little time to gather the relevant receipts and itemizing the deductions can result in better returns over standard deductions. If one is close to the standard deduction thresholds, don't miss out on those additional expenses that may push the deductions over and above the standard deduction. These expenses include qualified charitable contributions, casualty and theft losses if they are a result of a federally declared disaster, gambling losses up to gambling winnings and points paid on a new mortgage or refinanced home loan.

3. Claim That Friend You’ve Been Supporting

If you have been supporting your friend, partner, or relative, you can claim him/her as a dependent. There are specific rules regarding who qualifies, but the deduction is lawful if your non-relative has lived with you the entire year (relatives don't need to live with you), doesn't make for more than half of his/her own support. Although dependent exemption cannot be claimed under tax reforms, there is a new tax credit for non-child dependents worth up to $500.

4. Use A Health Savings Account (HSA)

Pre-tax contributions to a HSA can reduce taxable income. However, certain criteria must be met to open and contribute to an HSA.

• One must be enrolled in a health insurance plan that has high deductibles that meet or exceed the IRS’s required amounts.
• That plan must also impose the maximum annual out-of-pocket cost ceilings that meet the IRS’s limitations.

5. Pay Attention To The Child Tax Credit

Pre-tax contributions to a HSA can reduce taxable income. However, certain criteria must be met to open and contribute to an HSA.

• One must be enrolled in a health insurance plan that has high deductibles that meet or exceed the IRS’s required amounts.
• That plan must also impose the maximum annual out-of-pocket cost ceilings that meet the IRS’s limitations.
   

The terms "tax credit" and "tax deduction" are used interchangeably. But they are not the same. A tax deduction exempts a portion of the income from taxes, and savings are based on an effective tax rate. This means if one gets a $4,000 deduction, and the effective tax rate is 25%, you reap $1000 in savings.

A tax credit, on the other hand, is a dollar-for-dollar reduction of your tax liability, and your savings from it aren't dependent on the effective tax rate. This means that if you snag a $4,000 tax credit, you owe the IRS $4,000 less -- no matter how much tax you normally pay on your income. A taxpayer can avail a Child Tax Credit of $2,000 per annum for every dependent child of age 17 years and below.

  6. Timing: Key To Boost Tax Refunds

• Make January's mortgage payment before December 31 and get the added interest for your mortgage interest deduction.
• To boost your medical expense deduction potential, schedule health-related treatments, and exams in the last quarter of the year. 
• Make some charitable contributions, but make sure it is a qualified charity and be sure to keep track of your expenditures in your records.
• Those who are self-employed can make purchases that are qualified for deductions such as office equipment and software.

To keep up with such changes, we recommend you consult a tax attorney who can guide you through it.

7. Tax-favored Retirement Accounts

Broadly, there are two types of tax-favored individual retirement accounts (IRAs): traditional IRAs, which are “front-loaded,” and Roth IRAs, which are “back-loaded.” With front-loaded accounts, contributions are tax-deductible, but withdrawals are taxed. In back-loaded accounts, contributions are not tax-deductible, but accruals and withdrawals are tax exempt. In both versions, investment returns on account assets (accruals) are untaxed. Which is a better deal? That mainly depends on the difference between individuals’ tax rates during their working years and during retirement.

These are just a few tips to maximize your tax refund. A professional can help you understand things more clearly.