Smart Refund Moves for Families & the Self-Employed This Season

New Haven, Connecticut | Jose’s Tax Service | August 14, 2026

If you are still finishing your 2025 tax return, the October 15 extension deadline is approaching. If you already filed, now is the right time to review your withholding, estimated payments, and financial records for the 2026 tax year.

A larger tax refund usually comes from accurate planning rather than a single deduction. Families should review credits, dependents, childcare, education costs, and filing status. Self-employed individuals should verify business income, expenses, mileage, and quarterly payments.

Use the following refund strategies as a practical checklist. Eligibility depends on your income, filing status, documentation, and current IRS and Connecticut rules.

Important: An extension gives you more time to file. It does not give you more time to pay. Any balance due may accrue penalties and interest if it was not paid by the original deadline.

1. Review Every Income Document Before Filing!

Start with a complete income inventory. Missing income can delay processing, trigger an IRS notice, or require an amended return.

Gather the following documents:

• Form W-2, Wage and Tax Statement, from every employer.
• Form 1099-NEC, Nonemployee Compensation, for independent contractor income.
• Form 1099-MISC, Miscellaneous Information, when applicable.
• Form 1099-K, Payment Card and Third Party Network Transactions, for reportable platform payments.
• Form 1099-INT and Form 1099-DIV for interest and dividends.
• Form 1099-G for unemployment compensation or certain government payments.
• Form 1095-A, Health Insurance Marketplace Statement, if you received Marketplace coverage.
• Records of federal and Connecticut estimated tax payments.
• Business income summaries, receipts, mileage logs, and payment-platform statements.

Do not rely only on one tax form. Compare your records with bank deposits, bookkeeping reports, and prior-year returns. Income mismatches may lead to correspondence from the Internal Revenue Service (IRS) or Connecticut Department of Revenue Services (DRS).

For self-employed taxpayers, the IRS generally requires business income and expenses to be reported on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship). Net earnings may also be subject to self-employment tax calculated on Schedule SE (Form 1040), Self-Employment Tax.

2. Check Family Tax Credits Carefully!

Refundable credits can create or increase a refund even when your federal income tax liability is low. However, these credits have detailed eligibility requirements.

Earned Income Tax Credit

The Earned Income Tax Credit (EITC) is available to certain workers and families with low-to-moderate earned income. Earned income may include wages, tips, and net self-employment income.

To claim the federal EITC:

1. File Form 1040, U.S. Individual Income Tax Return, or Form 1040-SR, U.S. Tax Return for Seniors.
2. Confirm that your filing status, income, age, and dependent information meet the requirements.
3. Complete Schedule EIC (Form 1040 or 1040-SR), Earned Income Credit, if you claim a qualifying child.
4. Use the IRS EITC Qualification Assistant to review eligibility.

A refund that includes EITC may be delayed under federal law. The IRS cannot issue EITC refunds before mid-February. Errors involving Social Security numbers, qualifying children, or income can delay processing further.

Child Tax Credit and Additional Child Tax Credit

Use Schedule 8812 (Form 1040), Credits for Qualifying Children and Other Dependents, to calculate the:

• Child Tax Credit (CTC).
• Credit for Other Dependents (ODC).
• Additional Child Tax Credit (ACTC).

Verify each child’s name, Social Security number, relationship to you, residency, and age. A qualifying child generally must meet specific relationship and residency tests. The same child generally cannot be claimed by more than one taxpayer.

The IRS Schedule 8812 page provides the current form and instructions. Review the applicable tax-year version before filing.

3. Review Connecticut Credits for New Haven Taxes!

Federal planning does not complete your state return. Connecticut residents should review state-specific credits and filing requirements separately.

The Connecticut Earned Income Tax Credit (CT EITC) is a refundable state credit for qualifying working individuals and families. According to the Connecticut DRS, eligibility generally requires:

• Eligibility for the federal EITC.
• Earned income from employment, self-employment, or another qualifying source.
• Valid Social Security numbers for the taxpayer, spouse, and qualifying children.
• Full-year Connecticut residency, where required.
• Income and investment income within the applicable limits.

For the 2025 tax year, the CT EITC generally equals 40% of the federal EITC, subject to state requirements. Certain taxpayers with at least one qualifying child may also qualify for an additional state amount.

Review the official Connecticut CT EITC information and the current Schedule CT-EITC, Connecticut Earned Income Tax Credit, before submitting your Connecticut return.

If you own a home or vehicle in New Haven, also review current Connecticut property-tax-credit rules. Keep proof of qualifying property tax payments. The applicable credit may be limited, nonrefundable, or subject to income restrictions.

4. Compare the Standard Deduction With Itemizing!

Do not assume that itemizing is automatically better. Compare both methods using complete records.

Potential itemized deductions may include:

• State and local taxes (SALT), including qualifying Connecticut income and property taxes.
• Mortgage interest reported on Form 1098, Mortgage Interest Statement.
• Qualifying charitable contributions.
• Certain deductible medical expenses, subject to applicable limits.
• Other deductions allowed under current federal law.

The standard deduction may be more beneficial for many households. However, homeowners with substantial mortgage interest, charitable contributions, and state and local taxes should run both calculations.

Do not claim expenses without documentation. Unsupported deductions may lead to an IRS adjustment, additional tax, penalties, and interest.

5. Capture Legitimate Self-Employment Deductions!

Self-employed individuals often have more opportunities to reduce taxable income. They also carry a greater recordkeeping responsibility.

Review the following categories:

1. Ordinary and necessary business expenses.
   Include qualifying supplies, software, advertising, professional fees, insurance, and business services.

2. Business mileage.
   Maintain a contemporaneous mileage log. Separate business miles from commuting and personal travel. Include the date, destination, business purpose, and mileage.

3. Home office expenses.
   If a portion of your home is used regularly and exclusively for business, you may qualify for the home office deduction. The deduction may be available to both homeowners and renters. Review the IRS home office deduction guidance.

4. Business communications.
   Review the business-use portion of phone, internet, and related communication costs. Personal expenses should not be classified as business expenses.

5. Bookkeeping records.
   Reconcile business accounts monthly. Categorize transactions consistently. Retain receipts and supporting documentation.

Keep business and personal accounts separate whenever possible. This makes the tax return easier to prepare and improves the reliability of your financial reports.

The IRS Self-Employed Individuals Tax Center explains the filing process, quarterly payments, Schedule C, Schedule SE, and home office rules.

6. Recalculate Withholding and Estimated Payments!

A refund is not always the best cash-flow result. A very large refund may indicate that too much tax was withheld throughout the year.

Employees should use the official IRS Tax Withholding Estimator to review expected income, dependents, deductions, credits, and withholding. If adjustments are needed, submit a new Form W-4, Employee’s Withholding Certificate, to your employer.

Self-employed individuals generally make estimated payments because no employer withholds federal income tax, Social Security tax, or Medicare tax from business receipts.

Use Form 1040-ES, Estimated Tax for Individuals, to calculate payments. Review the four standard payment periods for calendar-year taxpayers:

• Income earned January 1 through March 31: due April 15.
• Income earned April 1 through May 31: due June 15.
• Income earned June 1 through August 31: due September 15.
• Income earned September 1 through December 31: due January 15 of the following year.

Recalculate when income changes materially. Underpayment may lead to penalties. Overpayment can reduce cash available for operating expenses, payroll, or household needs.

7. Use Your Refund as a Financial Planning Tool!

Once your return is complete, assign the refund deliberately. Consider applying it to:

• A high-interest credit card balance.
• An emergency savings account.
• Estimated tax payments.
• Retirement contributions.
• Health insurance premiums.
• Business equipment or bookkeeping support.
• A 529 college savings account, when appropriate.
• Necessary home or vehicle repairs.

Tax planning should continue after the refund arrives. Review your return for missed credits, inconsistent withholding, and large changes from the prior year. Then create a document checklist for the next filing season.

If you need support with a family return, Schedule C income, Connecticut credits, or year-round planning, review Jose’s Tax Service tax preparation options or schedule an appointment. In-person and virtual appointments are available for New Haven residents and out-of-state clients.

Final reminder: File complete information, verify every Social Security number, retain supporting records, and pay any balance by the applicable deadline. Accurate preparation can improve refund results and reduce avoidable processing delays.

Category: Tax Planning | Tags: tax refund, personal finance, IRS tips, New Haven taxes