A global pandemic. Winter weather in the hot heart of Texas. Social media challenges that included everything from choreographed family dances to endless plank poses. The year 2020 demanded a lot from us, with change and uncertainty around every corner, but one thing that has likely stayed the same is that you’re still interested in keeping more money in your pocket than in Uncle Sam’s.

And while there’s much that’s shifted in regards to filing taxes too, the secret to paying no more than you owe and getting a bigger tax refund still comes down to two key concepts: deductions and credits.

Understanding how to take advantage of each as well as getting to know the ins and outs of how coronavirus relief can affect your tax return may help make sure you’re not leaving money on the table when it comes to filing your taxes for the 2020 tax year.

Changes for the 2020 Tax Year

While there are changes made to the tax code nearly every year, this year in particular the IRS has implemented a number of measures as part of the American Rescue Plan Act (ARPA) that affect how individuals and families file their taxes.

Here are the most important changes to keep in mind:

• The federal tax deadline for individuals has been extended due to the COVID-19 pandemic from April 15, 2021 to May 17, 2021; with the option to file an extension due October 15, 2021
• Stimulus money that you received as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act is not taxable income
• If you received unemployment benefits in 2020, the first $10,200 ($20,400 per married couple) is also not taxable if your household income was less than $150,000
• The standard deduction increased for both single filers and those filing jointly as a married couple. It’s now $12,400 for single filers and $24,800 for those filing jointly

Deductions and Credits That Can Boost Your Tax Refund

Beyond adjusting your filing status to boost your refund potential, here are a few deductions and credits that you may be able to use to your advantage.

1. Earned Income Tax Credit (EITC)

The EITC is not necessarily new, but the IRS still reports that roughly 1 in 5 people who qualify for this tax break don’t claim it. This credit is aimed at low- to moderate-income workers between the ages of 25 and 64 who make less than $56,844 per household. As it’s a credit (and not a deduction), you can use it to directly decrease the amount of taxes that you owe — or even get a refund. Use the IRS’s EITC Assistant to see if you qualify.

2. IRA and HSA contributions

If you have a traditional individual retirement account (IRA) or a self-employed retirement plan, you have up until the point that you file your taxes to make a contribution that reduces your taxable income (this is known as a deduction). What’s more, if this is the first time you’re hearing about this deduction and you have some extra money to put away, you can even opt to open an account and make a tax-deductible contribution for 2020 that’s still valid.

Similarly, putting pre-tax dollars into a health savings account (HSA) can also pare down your taxable income. Keep in mind that you can also make contributions to this kind of account up until the filing deadline. The caveat here is that there are certain requirements to open and put money into an HSA (e.g. having a high deductible health insurance plan). 

3. Child and Dependent Care Tax Credit

Similar to the EITC, the child and dependent care tax credit is an opportunity to directly reduce your tax bill (or boost your refund). This credit is aimed at reimbursing you to some degree for expenses related to the care of a qualifying child or a dependent. Unlike the EITC, however, no matter how much money you make, you can still claim it.

The total value of the credit depends on your adjusted gross income and is a percentage of the total value of the expenses you paid to a care provider, like a daycare, so that you could work or look for work. For the 2020 tax year, the maximum amount you can use for this calculation is $3000 for one qualifying child or dependent and $6000 for two or more children or dependents