Receiving an IRS tax refund is one of the most anticipated moments of the tax calendar for many taxpayers.

If you are entitled to a refund, the additional money can help strengthen your savings, reduce debt, or finance future expenses.

But is it really possible to increase the amount you receive? In many cases, yes. By taking a few important steps before submitting your annual tax return, you can ensure you claim every deduction and tax benefit available.

Read on to discover our top tips for maximising your IRS refund.

How to increase your IRS tax refund

Receiving a larger refund is always welcome, particularly during periods of rising living costs. To maximise the amount refunded by the Portuguese Tax Authority (Autoridade Tributária e Aduaneira – AT), it is important to pay attention to several key aspects of your tax return.

• Keep track of the IRS tax calendar

One of the easiest ways to avoid losing money is to comply with all IRS deadlines.

Missing important dates may result in penalties, late fees, or the loss of certain tax benefits, all of which can reduce the amount you receive.

Make sure you are familiar with the annual IRS calendar and complete every required step within the applicable deadlines.

2. Validate and classify your invoices

Validating your invoices through the e-Fatura portal is essential to maximise your tax deductions.

Expenses must be correctly classified into the appropriate categories – such as healthcare, education, housing, restaurants, vehicle repairs, or general family expenses – to ensure they are fully considered in your tax calculation.

You should also verify that:

• all invoices have been issued with your taxpayer number (NIF); 
• no invoices are missing; 
• invoices for every member of your household have been validated. 

Failing to validate invoices may result in the loss of valuable tax deductions.

3. Compare joint and separate taxation

If you are married or living in a recognized civil partnership (união de facto), one of the most important decisions is whether to submit your IRS return jointly or separately.

The most advantageous option depends on several factors, including:

• each spouse’s income; 
• deductible expenses; 
• applicable IRS tax brackets; 
• the composition of the household. 

When filing separately, each taxpayer submits an individual tax return and is taxed independently.

With joint taxation, the couple submits a single tax return, and the taxable income is calculated based on the average income of both spouses.

Because every household is different, it is advisable to simulate both options before submitting your return.

4. Consider the best option when you have children

Households with dependent children should also evaluate how their tax return is submitted.

Depending on the circumstances, children may either:

• be included in the parents’ joint tax return; or 
• be allocated between separate tax returns when the parents file individually. 

In some situations, adult children aged between 18 and 25 who are working and whose annual income does not exceed the legal threshold may also be included in the household for IRS purposes.

Each situation should be analyzed individually to determine which option produces the most favorable tax outcome.

5. Pay attention to Annex E

Some taxpayers may benefit from declaring certain investment income in Annex E of their IRS return.

This may include income from:

• savings certificates (Certificados de Aforro); 
• Treasury certificates (Certificados do Tesouro); 
• term deposits; 
• share dividends; 
• other investment income subject to withholding tax. 

This can be particularly advantageous for taxpayers with relatively low taxable income, such as:

• employees with modest salaries; 
• pensioners; 
• unemployed individuals. 

Interest and investment income are generally subject to a 28% withholding tax.

For example, if an investment generates €100 in interest, only €72 is normally received, while €28 is withheld by the State.

Depending on your overall taxable income, including this income in your IRS return (known as aggregation or englobamento) may allow part or all of the withholding tax already paid to be recovered.

Before making this decision, it is advisable to compare both scenarios or seek professional tax advice.

Conclusions

Maximizing your IRS refund is not about exploiting loopholes – it is about ensuring your tax return accurately reflects your circumstances and that you benefit from every deduction and tax relief available under Portuguese tax law.

Simple actions such as validating invoices, meeting all deadlines, comparing joint and separate taxation, and reviewing your investment income can make a significant difference to your final tax outcome.

If you are unsure which option is most beneficial for your situation, consult a certified accountant. Professional guidance can help you optimize your tax position while ensuring full compliance with Portuguese tax legislation.