As the April 15th filing deadline nears, many American taxpayers appear on track for a double-digit increase in their refunds this year.
According to recent IRS filing season statistics, early filers have received an average refund of $3,804, up from $3,453 at the same time last year, representing a $351 increase, or about 10.2%.
A larger tax refund could be a silver lining in an otherwise uncertain economic environment. With inflationary pressures lingering, the investment outlook unclear, and geopolitical tensions weighing on markets and consumers, any additional cash back from the IRS could be a welcome relief for many households. Yet many taxpayers may still be leaving money on the table.
With April 15th rapidly approaching, financial advisors suggest several strategies could still help many individuals and couples reduce their 2025 tax bill.
Just Add Salt?
This tax season is significant for legislative changes that have brought more deductions. However, tax settings could have easily gone the other way. A slew of cuts originally enacted in 2017 had been set to end at the end of 2025. Had they expired, one estimate shows the average filer would have seen an almost US$3,000 increase to their tax bill starting in 2026. Instead, this year is likely to be a bumper year for tax savings.
For instance, there is an elevated SALT (state and local tax) deduction in effect, which is advantageous for those in high-tax states. The deduction is for taxpayers who itemize their deductions to reduce their federally taxable income and was originally set at $10,000 by the Tax Cuts and Jobs Act (TCJA). However, for 2025, the legislation for President Trump’s “Big, Beautiful Bill” raised the SALT cap to $40,000.
There are also deductions for tip income. Workers in approved occupations, such as hospitality, who receive qualified gratuities can deduct up to $25,000 in tip income from their taxes for the first time. Workers who earn more from overtime hours can also benefit from a deduction for pay exceeding their regular rate. If an employee typically earns $20 per hour and earns $30 per hour when working overtime, they qualify for a deduction of the extra $10 (up to $12,500 per person).
There are savings for older workers, too. Jon Lapp, founder of Haven Financial Advisors, recommends that workers in their early sixties take advantage of the new SECURE 2.0 “super catch-up” contribution. “It is now in effect for people ages 60–63 – if you’re in that window and contributing to a workplace plan, your catch-up limit is $11,250 instead of the standard $7,500,” Lapp says.
“This will have a very tangible impact”, says Lapp. “An extra $6,000 deduction per person (regardless of standard or itemized deductions). But it does start to phase out over $150,000 of income.”
These are just the latest available tax breaks, however. Many Americans aren’t taking advantage of the benefits already available to them.
Wealthy (And Healthy)
According to Cliff Brockmann, founder of High Touch Financial Planning, one of the most under-utilized strategies is maxing out an HSA (Health Savings Account) – a savings vehicle especially designed to fund medical expenses.
“The max contribution for 2025 is $4300 for individuals and $8550 for families,” says Brockmann. “You are required to have a high-deductible health plan (HDHP), but most people who have one don’t max it out because they are unaware they can invest the money in their HSA for long-term growth.”
HSAs offer a tax deduction today, tax-free growth, and tax-free withdrawals for qualifying expenses. “It’s the only triple-tax-advantaged account available,” says Lapp. “Also, if you need a last-minute option for tax savings, HSAs and IRAs can be contributed to for the previous tax year up until April 15.”
DIY or Hire Help?
Another factor to consider is whether to file your tax return yourself or hire a professional to submit it. More than half of American taxpayers hired professionals in 2025, according to the Internal Revenue Service (IRS). Most pay a flat base fee plus extras depending on their case. In 2023, the national average cost for a professional filing was $248 for an individual 1040 return and $604 for a business return.
This extra cost is optional and needless for many people. Lapp says people with simple W-2 income and standard deduction should handle taxes themselves.
“Any of the common software applications work well for straightforward situations, and FreeTaxUSA, an online platform, provides a free option for federal taxes,” he adds.
However, if you have earned rental income, sold real estate, received stock options, had a major income change, or are dealing with an estate, Lapp recommends a pro.
“The fee is worth it if any of these changes are happening in the near future,” says Lapp. “It’s better to coordinate with your CPA and financial planner ahead of time. You will have more flexibility and tax strategies available if you are proactive.”
Anthony Ferraiolo, partner advisor at AdvicePeriod, agrees that longer time horizons are worth it.
“For my clients, especially those with ISOs, NSOs, or RSUs, the proactive coordination and record keeping is the key to managing their tax bill,” he says. “This is because these types of things that can move the needle can take multiple years to pan out.”
As the filing deadline approaches, several strategies remain available to help taxpayers reduce their 2025 tax bill. From maximizing HSA contributions to taking advantage of new deductions and catch-up provisions, a few last-minute moves could make a meaningful difference, especially for those who plan ahead.
