TAX season is almost over, but there’s still time to save money while filing.
One simple move could reduce what you owe on your tax return, but you have to file before midnight on April 15.
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This step could even increase the amount you receive in your refund.
However, time is running out, as the deadline to file is 11:59pm local time on April 15.
As of April 2025, the average tax refund for 2024 is around $3,170, according to data from CNBC.
In order to boost their refund – or even eliminate what they owe – Americans are encouraged to contribute more to an Individual Retirement Account (IRA).
According to Money.com, those with a traditional IRA can still make contributions for the 2023 tax year up until the April 15 deadline.
Putting enough money into the account could lower a person’s taxable income.
That could reduce their tax bill, or even increase their refund.
HOW IT WORKS
Americans with a traditional IRA can estimate their savings from this last-minute strategy.
To do so, they can multiply their IRA contribution by their marginal tax rate.
Fidelity defines the marginal tax rate as the percentage taxed on the last dollar of income.
It also determines which tax bracket a person is placed in.
In 2024, Americans earning $11,600 or less are placed in the 10% marginal tax bracket.
The rate rises gradually from there – 12%, 22%, 32%, and higher.
Someone contributing the full $7,000 to a traditional IRA before April 15 and in the 22% bracket could save around $1,540 on their taxes.
2025 Tax Season
Tax season started on January 27 and folks must have theirs completed filed on April 15.
Those who fail to file by that time may face penalties.
However, taxpayers who need more time may file for an extension – this gives them until October 15.
The way to do this is by filling out Form 4868, the Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.
This can be done by mail, online with an IRS e-filing partner, or through a tax professional.
While there’s no set schedule, the IRS revealed that taxpayers may receive refunds within 21 days of filing.
Just be sure to avoid making mistakes on any forms as that could tack on extra time.
Those filing through mail will likely get their returns within a month or could even face delays as the IRS processes millions.
As of January 31, the average refund amount totaled $1,928, per the IRS.
This is compared to the $1,395 for the same period in 2024.
The average direct deposit refund for 2025 was even higher, the IRS said, at $2,069.
To check the status of your refund, The IRS has an online tool called Where’s My Refund?
This works within 24 hours of e-filing and generally within four weeks of filing a paper return.
You can find the full breakdown of federal income tax brackets on the IRS website.
BEFORE THE DEADLINE
Some taxpayers – like those filing jointly with a spouse who has a workplace retirement plan – may not qualify for a full IRA deduction if their income is above a certain threshold.
However, individuals without an employer plan may be able to deduct the full $7,000.
Setting up a traditional IRA takes just minutes through platforms like Fidelity or Vanguard, and funds can be deposited online quickly.
You can also roll over existing 401(k) or IRA accounts.
As tax season wraps up, keep in mind some Americans qualify for automatic extensions, and there are multiple ways to file taxes for free.