Why Simple Tax Filers are Leaving Money on the Table — and How to Fix It

Key takeaways

• Simple filers may be missing valuable tax credits and deductions
• Retirement contributions before the tax deadline can still lower your tax bill
• Tax filing uncertainty — not complexity — is causing Americans to leave money on the table

Millions of simple tax filers may be leaving money on the table — not because their returns are complicated but because uncertainty keeps them from claiming what they’re eligible for.

New TurboTax survey research highlights a clear pattern: 44% of Americans are confused as to how new tax provisions apply to their income. That hesitation — not complexity — has real consequences: missed credits, overlooked contributions, and preventable tax bills.

Max Your Retirement Contributions Before April 15

Many simple tax filers overlook retirement contributions because they assume tax savings require complex planning.

For W-2 filers who take the standard deduction, contributing to a traditional IRA before the April 15 tax deadline can still reduce taxable income for the prior tax year. Contributions reduce taxable income dollar for dollar, which can translate into meaningful savings depending on income level. For example, a $7,000 contribution — the 2025 limit for filers under age 50 — could reduce taxes by approximately $1,680 for someone in the 24% tax bracket or $1,540 for someone in the 22% bracket. 

Even smaller contributions can provide partial savings, making retirement contributions one of the few remaining ways to lower your tax bill after the calendar year ends.

“Last-minute IRA contributions are generally one of the few remaining ways to lower last year’s tax bill after the year has ended. This strategy is often overlooked because people assume all financial deadlines for the tax year fall on Dec. 31, not realizing they have until the tax deadline to potentially increase their refund,” said Lena Hanna, certified public accountant and enrolled agent with TurboTax.

Know Which Credits You May Qualify For

Fear of making filing mistakes continues to prevent many Americans from claiming credits they may be entitled to. TurboTax data shows that 50% of filers worry about errors when claiming credits, even though credits directly reduce a tax bill or increase a refund. Unlike deductions, which reduce taxable income, tax credits reduce your tax dollar for dollar. 

This data suggests that hesitation outweighs clarity; even straightforward returns can result in missed savings.

Commonly overlooked credits for simple filers include the Earned Income Tax Credit, the Child Tax Credit, and the Saver’s Credit for retirement contributions. Many filers assume these credits do not apply to them based on income level or family status. 

Eligibility rules and income thresholds can change year to year, which makes assumptions costly. Many filers use tax software to help uncover credits they might otherwise miss by answering straightforward eligibility questions.

Understand the New Tax Provisions

New tax provisions for 2025 may affect workers with W-2 income, particularly those who earn tips or work overtime. Despite these changes, the research shows that 44% of Americans are uncertain how updated rules apply to their income.

Key updates include proposed exclusions for certain tip income of up to $25,000, along with enhanced deductions tied to qualified overtime income of up to $12,500, or $25,000 for married filers. These provisions are designed to help everyday and essential workers keep a large share of their earnings.

For example, a restaurant worker who earned $15,000 in reported tips could see that entire amount deducted from their taxable income under the new rules, making eligibility checks especially important for filers who rely on tips or overtime pay.

“These new rules are essentially a ‘tax-time raise’ for everyday workers because it allows them to keep a larger share of their hard-earned income. Even if the employer didn’t separate overtime premiums or tips on their W-2, the IRS allows taxpayers to use the last paystub of the year or similar documentation to enter the necessary amounts into tax software,” said Hanna.

Don’t Wait — File Now

Delaying filing can reduce the time available to review information or correct mistakes. TurboTax research shows that 38% of Americans plan to file later than usual due to confusion about tax changes, even though waiting can limit the ability to fix errors or follow up on missing information, or make last-minute contributions.

What to do now:

• Review last year’s return to spot missed credits or deductions
• Gather key documents early, including W-2s and 1099s
• Check whether you can still make a retirement contribution before filing
• Leave time to address questions or correct errors if they come up

For filers expecting a refund, submitting sooner may also mean receiving funds earlier. Survey findings suggest that clarity — not just speed — can reduce tax-season stress, especially during periods of elevated financial pressure.

The Bottom Line

TurboTax survey research highlights a persistent gap: Tax filing uncertainty continues to prevent Americans from making informed money decisions — and that hesitation can translate into missed opportunities.

For simple filers with W-2 income and standard deductions, maximizing a refund often comes down to clarity — understanding available credits, taking advantage of retirement contribution deadlines, recognizing new provisions, and filing with enough time to avoid last-minute errors. 

That data suggests the issue isn’t complexity — it’s confidence. When filers understand what applies to them — and when — they’re more likely to claim what they’re entitled to and move through tax season with greater financial control.

*About the Research: TurboTax commissioned Wakefield Research to conduct a survey of 1,000 U.S. adults on Sept. 19 and Sept. 28, 2025. The study examines American attitudes and behaviors around tax filing.