7 smart ways to use your tax refund in 2026
Mar 23, 2026
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This year, many Americans could see noticeably larger tax refunds.
Changes to tax laws are expected to boost total individual refunds by about $55 billion, bringing the national total to roughly $350 billion, according to Morgan Stanley Research.
That could mean around $3,500 back in your pocket — up from an average of $2,940 in 2025.
It might be tempting to treat that money like free cash and spend it on a new phone or a quick getaway.
But instead of splurging, consider using it strategically to give yourself a financial breather or an advantage, whether that’s paying down credit card debt or contributing to your IRA.
Here are seven smart ways to make the most of your tax refund this year.
Make your cash work harder
Parking your refund in a traditional checking account may feel safe, but it’s not doing you any favors. Many big banks still offer interest rates as low as 0.01%, which means your money is actually losing value due to inflation.
Moving that cash to a high-yield option like the Wealthfront Cash Account could help it grow faster.
A Wealthfront Cash Account currently offers a base variable APY of 3.30%, and new clients can get an extra 0.75% during their first three months on up to $150,000 for a total variable APY of 4.05%².
That’s ten times the national deposit savings rate, according to the FDIC’s January report³.
With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, your funds remain accessible at all times.
Plus, Wealthfront Cash Account balances of up to $8 million are insured by the FDIC through program banks.
If you’re comfortable with locking your cash in for six months or a year for a higher rate, consider a Certificate of Deposit (CD).
A platform like CD Valet can help you find higher-yield options that work for you, whether you’re saving for something soon or building a cushion for the long haul.
CD Valet tracks over 40,000 verified rates from FDIC-insured banks and NCUA-insured credit unions nationwide. Unlike other websites, they show every publicly available rate, ensuring you have a comprehensive view of the market.
To help you save smarter, CD Valet provides free, specialized tools.
- Earnings calculator: See exactly how much interest you’ll accrue by the end of your term. Adjust different rates and terms to see how much you can earn with a 12-month vs. a 24-month CD.
- CD rates map by state: See real-time offers of the best CD rates across the country. Many institutions allow you to open an online account, so you can take advantage of a great CD rate without being located in that state.
Plus, their CD rates are updated continuously, so you can shop, compare and open CDs with ease.
Pay down high-interest debt
Using your refund to wipe out high-interest debt can immediately improve cash flow and reduce financial stress.
Paying off a credit card with a 24% interest rate is like earning a risk-free 24% return. The money you would have otherwise lost to interest stays in your pocket.
If you can’t pay off your entire balance with your tax refund, consider looking into debt consolidation through a personal loan at a much lower interest rate.
Instead of juggling multiple monthly payments, you'll have one predictable payment to manage each month.
Platforms like Credible help streamline this process by allowing borrowers to compare personal loan offers from multiple lenders in one place, making it easier to identify lower-rate options without applying to each lender individually.
Through Credible's online marketplace, you can comparison-shop for the lowest interest rates with just a few clicks.
In less than three minutes, you’ll see all the lenders willing to help pay off your credit cards or other debts with a single personal loan.
If you owe more than $30,000 and you’ve already tried debt consolidation, you may want to see if you qualify for a debt relief program to help clear a significant portion of your balance.
With Freedom Debt Relief, you can speak with a certified debt relief consultant for free, who can show you how much you can save by partnering with them.
They can also help negotiate settlements with your creditors until all enrolled debt is resolved.
Add gold to your retirement mix
Consider using your tax refund to diversify a portion of your existing retirement holdings into a gold IRA, which combines the protective benefits of gold with the perks of a tax-sheltered account.
Because gold has historically helped preserve purchasing power during periods of inflation and market volatility, many see it as a way to balance portfolios that are heavily weighted toward stocks.
The timing may also matter. Several provisions of the SECURE 2.0 Act are reshaping retirement contributions in 2026:
- The ‘super catch-up’ window: Savers aged 60 to 63 can make a larger ‘super’ catch-up contribution of up to $11,250 to workplace retirement plans.
- New Roth requirements: Higher earners making over $145,000 must now make catch-up contributions on a Roth basis. Using a tax refund to cover those after-tax contributions today could potentially allow that money to grow tax-free later.
- IRA limit increases: Contribution limits have climbed again for 2026, giving savers more room to put extra money to work inside tax-advantaged accounts.
Companies like Priority Gold can help you transition a portion of your portfolio into physical assets.
They offer a 100% free rollover process for existing IRAs, plus free shipping and storage for up to five years. For those making a qualifying purchase, you could also receive up to $10,000 in free silver.
To learn more about how Priority Gold can help shield your hard-earned savings from inflation or economic volatility, download their free 2026 gold investor bundle.
Dip a toe into real estate — without buying property
You don’t need a massive downpayment to gain exposure to real estate anymore.
For instance, the Fundrise Flagship Fund³ is a $1 billion private real estate fund that lets you invest in an expertly crafted strategy without needing hundreds of thousands of dollars. You don’t need to be an accredited investor, and you can get started with as little as $10.
With 4,700+ single-family homes and 2,500+ residential units owned by the Fundrise Flagship Fund, you get exposure to institutional-style scale and diversification.
Industrial
215 Interchange
Las Vegas, NV
Build-for-rent
Pine Ridge
Fountain Inn, SC
Build-for-rent
Omnia
Richmond Hill, GA
These are a few examples of properties powering the Fundrise Flagship Fund. For a full list of the Fundrise Flagship Fund's portfolio properties see the Flagship Fund website
After you place your first investment, the Fundrise Flagship Fund will work to find and add new assets to your portfolio over time and send you transparent updates along the way.
It only takes a few minutes to sign up now and become a real estate investor today.
Put investing on autopilot
You can also use your refund to start investing. And if you’re a beginner, there are plenty of ways to take a hands-off approach, while also starting small.
Platforms like Acorns make this incredibly straightforward.
The investing app rounds up your daily purchases to the nearest dollar and invests the spare change after matching you with one of five automated portfolios designed to align with your financial goals.
Beyond its round-up feature, you can set up recurring contributions in just three minutes and keep your nest egg growing on autopilot.
Plus, as a Moneywise reader, you get $20 when you set up a recurring deposit.
Strengthen your family’s safety net
Life insurance often gets pushed to the bottom of the to-do list. But using part of your refund to secure coverage can provide lasting peace of mind.
Providers like Ethos offer fast, competitive quotes for term coverage tailored to your specific needs.
The application can take as little as 10 minutes. Most applicants won’t need blood work or an in-person exam — just answer a few basic health and lifestyle questions.
Using real-time data, Ethos can often deliver an instant quote and, in many cases, same-day approval. You may be able to get up to $2 million in coverage, starting at just $2 per day.
Consult a pro for a roadmap
Putting a refund to work is much more effective when it fits into a broader strategy.
When you receive a tax refund in your 50s or 60s, it isn’t just a windfall. It’s a strategic asset that needs to be placed in the right ‘bucket’ to minimize your future tax bill.
If you are over 50, the IRS allows you to make catch-up contributions to your retirement accounts. But knowing which account to fill first — or how to balance a refund against your RMDs (required minimum distributions) — is where many retirees could stumble.
By hiring a fiduciary advisor, you are gaining a strategist who looks at your financial picture — from real estate and investment accounts to your cash reserve and 401(k) — as a single, cohesive unit.
Unlike a standard broker, a fiduciary is legally bound to put your interests first. They help you stop managing a collection of random accounts and start planning for your retirement strategically.
Platforms like Advisor.com take the guesswork out of finding this expertise.
Just indicate what you need help with — such as tax optimization, retirement or estate planning — and answer a few quick questions through their online form. The platform will match you with a vetted financial advisor in about five minutes.
You can set up a free, no-obligation-to-hire call to see how they can help you create an actionable plan for your refund and determine if their approach and pricing model make sense for your retirement goals.
Marie Alcober is a commercial content manager at Moneywise. She has worked as an editor, writer and producer for various media outlets, including MSN Canada, BNN Bloomberg, News UK, CBC Arts and Corus Entertainment.
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