The early bird, as they say, gets the worm. When it comes to filing your tax return, the early bird gets the refund faster.
Even if you don't have a refund coming your way, there are benefits to filing early, if you can. For one, it's a weight off your shoulders until next year. But you may also pay less for tax prep.
Most major tax-prep providers discount their software or services early in the season. Turbotax, for example, is offering 20 percent off TurboTax Online products until February 19, 2017. That promotion isn't advertised everywhere, but you can head over to Turbotax now to grab it.
While filing early can save some cash and put your refund back in your pocket faster, don't file so fast that you make costly mistakes. While you might not be able to wipe out your entire tax burden like President Trump reportedly did for 18 years, there are still plenty of legal ways to reduce the amount of taxes you owe.
Here are three ways non-billionaires can pay fewer taxes and claim a bigger refund.
Make sure you're well adjusted
Adjustments reduce your adjusted gross income (AGI), which is your gross income - the total amount of money you got paid in a year - minus a few very specific deductions.
The biggest adjustment someone in their 20s is likely to take is the student loan interest deduction.
Your income can also be adjusted for up to $5,500 in retirement savings you put into a traditional IRA, The great news? You can still take advantage of this deduction even if you didn't save money last year. You have until tax day of this year to make IRA contributions that will count for the prior tax year.
With the exception of the student loan income deduction, the thing about deductions is that you usually have to put money into an untouchable account in order to avoid paying taxes on int. You may not have that luxury. But it's a good tax move if you can.
Get your deductions in order
Deductions don't directly reduce your tax bill. Instead, deductions reduce your adjusted gross income (AGI), and thus your taxable income, which will then lead to owing few taxes.
When people talk about "writing off" an expense, they're usually talking about itemized tax deductions. As the name suggests, itemized deductions are the ones you list individually.
Most people (especially most young people) are probably better served taking the standard deduction, which is $6,300 for a single person in 2016. You should itemize your deductions only if they would add up to more than $6, 300.
When might this come into play? If you owned a home and paid more than $6,300 in interest and property taxes, incurred medical expenses that exceeded 10 percent of your AGI, or made charitable gifts that exceeded the standard deduction. (Or any combination of these and other expenses).
Take credit where credit is due
Credits are the best tax break out there because, unlike deductions or adjustments, they directly reduce the amount of tax you owe, rather than the amount of your taxable income. Some credits are even refundable, meaning that if you zero out your tax bill and there's still some credit left over, you get a refund.
American Opportunity Credit
For young students, the best tax credit is probably the American Opportunity Credit, which lets you claim a credit of up to $2,500 for qualified education expenses in your first four years of undergraduate study. You can deduct 100 percent of qualified expenses up to $2,000 and 25 percent of expenses over $2,000, up to a maximum credit of $2,500.
As with most credits, this one is subject to income limits. If you're a single filer with adjusted gross income (AGI) between $80,000 and $90,000, or a joint filer with an AGI between $160,000 and $180,000, the credit gets phased out. If your AGI is above those amounts, you can't claim it.
The American Opportunity Credit is 40 percent refundable. That means you could get up to $1,000 even if you owe no tax otherwise.
Lifetime Learning Credit
If you paid tuition but don't qualify for the American Opportunity Credit, look at the Lifetime Learning Credit. You may be able to claim 20 percent of up to $100,000 you spent on qualifying post-secondary (college or graduate) tuition and fees - a maximum credit of $2,000.
The Lifetime Learning Credit is not refundable, but it can reduce your tax bill to zero. Any student of any age can claim it, and you don't have to working toward a degree to get it.
The American Opportunity Credit is a better deal if you qualify, but the Lifetime Learning Credit can help a little bit if you don't. And no, you cannot, unfortunately, claim both.
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